President Donald Trump signed an executive order on Thursday, declaring that his proposal to sell TikTok’s US business to American and international investors would satisfy national security needs. Vice President JD Vance stated that the new American company would be worth about $14 billion, which places a valuation on the popular short video app well below what some analysts estimated it was worth. Most recent news reports reveal Trump has pushed back the enforcement of the law prohibiting the app to December 16 as work goes on to detach TikTok’s US assets from the international platform.
Trump said he discussed the deal with Chinese President Xi Jinping and informed him of what they were doing. Trump said that Xi told them to proceed with the sale. Release of the executive order indicates that Trump is moving forward with selling TikTok’s US assets, but many of the details still have to be sorted out, such as who will own the company’s most valuable asset, its recommendation algorithm that determines what videos users watch.
Oracle and Silver Lake to Own Half of New American TikTok
A trio of investors, including Oracle and private-equity firm Silver Lake, will have about 50% ownership in TikTok US, two sources close to the deal said. A group of current shareholders at ByteDance will have about 30% ownership, with current ByteDance investors such as Susquehanna International Group, General Atlantic, and KKR. Due to high investor demand for TikTok, the 50% stake could still fluctuate as the deal is negotiated.
Trump added that Michael Dell, Rupert Murdoch, and likely four or five other top investors would be included in the deal. CNBC reported previously that Abu Dhabi-based MGX, Oracle, and Silver Lake are set to be the primary investors in TikTok US with a combined 45% stake. The White House did not clarify how it arrived at the $14 billion valuation, which is significantly lower than analyst estimates of $30-40 billion.
Chinese Firm Will Maintain Smaller Stake in US Operations
The deal involves ByteDance nominating one of seven members of the new company’s board, with Americans taking up the remaining six seats, said a White House senior official. ByteDance would own less than 20% in TikTok US to meet stipulations in the 2024 law that demanded it shut down by January 2025 if its US assets were not divested. There was some opposition on the Chinese side, Vance informed reporters, but they wanted to keep TikTok running while also safeguarding Americans’ data privacy as mandated by law.
Republican congressional lawmakers alleged that they need to know more about the deal in order to be certain that it constitutes a clean break from China. Representatives Brett Guthrie, Gus Bilirakis, and Richard Hudson stated that they need to make certain that this deal safeguards American users against the influence and monitoring of entities associated with the Chinese Communist Party. Trump has attributed TikTok, which boasts 170 million US users, with assisting him in securing his reelection last year, and is followed by 15 million followers on his individual handle.
FAQs
1. How much is the TikTok US sale worth?
The deal places the value of the new US company at approximately $14 billion as per Vice President JD Vance.
2. Who owns the new American TikTok?
Oracle and Silver Lake will have around 50%, approximately 30% to existing ByteDance shareholders, and ByteDance under 20%.
3. When does the law currently require TikTok to be sold?
The law had asked ByteDance to sell by January 2025, but Trump extended the deadline until December 16.
4. Did China authorize the sale?
Trump stated he spoke to President Xi Jinping, and he instructed him to proceed with the deal.
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