Microsoft Set To Buy Tik Tok

TikTok is scrambling to keep its American presence alive, and Microsoft has emerged as a potential, albeit unlikely, savior.

Microsoft (MSFT) on Sunday said it is pushing forward with talks to acquire TikTok, following a conversation between CEO Satya Nadella and President Donald Trump, who previously threatened to ban the app in the United States.

The transaction could be complicated and difficult to accomplish. And Microsoft has in recent years shifted its strategy away from consumers toward businesses.

It’s clear why TikTok would be interested in the deal: Trump has said he will ban the app if it doesn’t find an American buyer by September 15. Microsoft may be TikTok’s only hope. While other Big Tech firms might seem like a more natural fit to acquire TikTok — Facebook (FB), Google (GOOGL), Amazon (AMZN) and Apple (AAPL) are facing antitrust scrutiny that would likely get in the way of an acquisition.

Read Also: Keeping Hope Alive in A Bleak World

Microsoft would probably pay some portion of $50 billion — the estimated valuation of TikTok as a standalone business — to take control of the app’s operations in the United States, Canada, Australia and New Zealand. News of the possible deal broke on Friday, and since the closing bell on Thursday, Microsoft’s market cap has gained $80 billion, a sign that investors like the idea.

said he estimates TikTok’s valuation could reach $200 billion within just a few years “given the steep user and engagement trajectory of TikTok.” DA Davidson analyst Rishi Jaluria agreed, saying TikTok has the potential to grow “exponentially,” especially because social media use has exploded during the coronavirus pandemic.

Culled From CNN

Leave a Reply