Ever since he got the keys to X, Elon Musk has been using the platform as his personal loudspeaker. Imagine what he would do with TikTok.
Earlier, Bloomberg and The Wall Street Journal reported that Chinese officials had discussed Musk as a possible buyer of TikTok’s US operations if it can’t put the brakes on a planned 19 January ban of its short-video app.
Contacted by MONIIFY, a TikTok spokesperson dismissed reports of a sale to Musk as “pure fiction.”
But a US ban would hurt TikTok, really bad.
Read more: #HotStox: Watch out, Big Tech=big moves
Show me the numbers
The country is the biggest source of revenue for TikTok shop, earning a cool $9 billion in 2024, according to a report by Singapore-based venture firm Momentum Works, quoting TikTok shop analytics startup Tabcut.
TikTok ad revenues in the US are projected to reach $10.42 billion in 2024, says market research company eMarketer.
Of TikTok’s 1.04 billion monthly active users worldwide, around 17%, or 170 million, are in the US, with adults spending a whopping 53.8 minutes a day on the app. Meanwhile, X had 106.23 million users in the US as of April 2024, according to Statista.
Read more: #Snapshot: Don’t mess with Elon
The clock’s ticking
Any merger could be a game changer for the social-media landscape in the US, especially for Musk’s X.
- X could level up big time with TikTok’s engaged audience.
- Advertisers would flock to X for more reach.
- Musk’s AI company, xAI, could tap TikTok’s juicy data for next-gen AI development.
- And this could potentially mean a much more formidable competitor for Meta, whose shares hit a record-high of $629.78 on 6 December after the court upheld TikTok’s sell-or-ban ruling.
China has a cozy and long-standing relationship with Musk, who’s also chummy with incoming president, Donald Trump. Tesla, which is owned by Musk, has a significant presence in the country, including a gigafactory in Shanghai.
If the deal does go through, it could signal that there’s room for China and the US to ease their relationship and open doors for negotiations in other areas such as trade, says Tianchen Xu, senior economist at The Economist Intelligence Unit.
While any sale could be beneficial for X, it might be more bad news for TikTok, Xu tells MONIIFY. Why? Musk has a poor track record of running and monetizing social-media platforms.
TikTok’s future in the US remains uncertain as legislation demands ByteDance sell or shut down its US operations over national security concerns. TikTok says this violates First Amendment free-speech rights.
TikTok’s best bet rn? Stave off the ban or delay it until Trump comes into office on 20 January. Either way, it’s going to be a long week for the Chinese social media giant.
Read more: The Mag 7 are eating global stock markets alive
So how do you MONIIFY this?
That depends on how you think this all will play out.
If you think the ban is coming, Meta would surely benefit. Ergo. Good time to buy. Though it’s been hitting new highs, the stock’s valuation has been trailing below many of the Magnificent Seven peers and the Nasdaq 100.
Or look at Snap Inc. and Pinterest; both of those stocks have slumped from Covid-boom times.
If you think a Musk deal is not such a fiction, then X is a good bet. The only way to do that in public markets is via Tesla. The carmaker’s super-expensive rn tho, riding on the Trump-Musk bromance, and it doesn’t own X. It’s more like a punt on Musk… and who knows how long he’ll stay in Trump’s good graces.
Edited by Victor Loh. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
