In the wake of mounting pressure from the US government, analysts predict that Microsoft and Oracle may emerge as potential buyers for the US operations of TikTok, owned by the Chinese company ByteDance.
The US government is pushing ByteDance to divest its American TikTok operations or face a nationwide ban. The House of Representatives has recently passed a foreign policy bill that includes revised language outlining measures for TikTok, extending the divestment period from six to twelve months. President Biden has indicated his support for the legislation, making its passage likely.
Wedbush analysts believe that Microsoft and Oracle are the most likely buyers of TikTok Global. They cite the companies’ previous interest and the strategic fit as reasons for their prediction. Other potential bidders may include private equity firms and consortiums, including those associated with former Treasury Secretary Steven Mnuchin.
However, Wedbush analysts acknowledge the complexity of the potential sale as it remains unclear what would be included in the transaction if ByteDance were to sell. They emphasize that the value of TikTok would be significantly diminished without its algorithms, a factor that could complicate the sales process.
Furthermore, analysts anticipate legal challenges from ByteDance if the bill is passed, potentially delaying the initiation of any sale process.
