TikTok’s leadership is discussing the possibility of separating from ByteDance Ltd., its Chinese parent company, to help address concerns about national security risks, reports Bloomberg.
A divestiture, which could result in a sale or initial public offering, is considered a last resort, to be pursued only if the company’s existing proposal with national security officials doesn’t get approved, according to people familiar with the matter, who declined to be named discussing non-public information. Even then, the Chinese government would have to agree to such a transaction, the people said.
TikTok’s US business could be valued at $40 billion to $50 billion based on social media multiples and other factors, according to Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz.
TikTok is under scrutiny for its Chinese ownership, which US officials are concerned could lead to manipulation or spying by China on Americans — a fear TikTok is working to address. The company, which is undergoing a national security review by the Committee on Foreign Investment in the United States, agreed last year to implement a number of changes in a plan it calls Project Texas. The proposal includes bringing in American tech giant Oracle Corp. to host US user data and review its software, and appointing a three-person government-approved oversight board. Many of the moves are already under way.
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