"The $14 billion valuation that the Trump administration has estimated for TikTok's US business falls well below projections, surprising investors who say a deal at that price would be a bargain for potential buyers including Larry Ellison's Oracle Corp. and partner Silver Lake Management LLC. The rough estimate, cited by Vice President JD Vance on Thursday, pales in comparison to previous estimates that scaled closer to $40 billion."
"By every major financial metric and peer comparison, this price tag looks dramatically misaligned with reality. TikTok's video-sharing platform ranks among the most popular US social media properties based on average daily app usage. Its influence has also been felt in the proliferation of competing short-video services like Instagram Reels and YouTube Shorts. Valuing it has always been difficult, particularly given the complexity of the app's coveted content algorithm."
"Vance conceded that the purchasers will ultimately determine the amount paid. While expected buyers would likely welcome a low-ball valuation, ByteDance and its existing investors may find it amusing, if not insulting. Ashwin Binwani, who is founder of Alpha Binwani Capital and doesn't hold ByteDance shares, said the proposal could be the most undervalued tech acquisition of the decade. He estimated the floated figure reflects a third of TikTok's true value."
The U.S. estimate values TikTok's US business at $14 billion, significantly below earlier valuations near $40 billion. Potential buyers named include Oracle and Silver Lake, and the purchasers ultimately determine the final price. Industry observers call the figure undervalued; one analyst estimated it represents roughly one-third of true value. TikTok US, with about 170 million active users, generates over $10 billion in annual revenue. The implied price-to-sales ratio is about 1.4 times, comparable to mature, low-growth firms. The platform ranks among the most-used US social apps and influenced competing short-video services, while valuation remains challenging due to its algorithm.
Read at www.mercurynews.com
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