The social network and TikTok, owned by China’s ByteDance, have engaged in “preliminary” discussions about merging TikTok’s U.S. operations with Twitter, the Wall Street Journal reported, citing anonymous individuals.
Twitter declined to comment. A TikTok rep said via email Sunday, “As a matter of corporate policy we do not comment on market rumors.”
The M&A chatter about Twitter and TikTok emerges after Microsoft last week confirmed that it has been exploring a TikTok takeover. That comes under the threat of Donald Trump’s effective U.S. ban of TikTok by Sept. 20 — with the president claiming the popular lip-syncing app “continues to threaten the national security, foreign policy, and economy of the United States” — if ByteDance can’t close a deal with an American buyer for TikTok’s U.S.-based business by then.
Meanwhile, TikTok is planning to sue Trump over his Aug. 6 executive order as early as this Tuesday, arguing the president’s unilateral move is unconstitutional because it denied TikTok any due process, NPR reported. The lawsuit also will allege that Trump failed to provide any evidence that would show TikTok is a danger to the U.S.’s national security, per the report.
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On Friday, TikTok called Trump’s order a “dangerous precedent for the concept of free expression and open markets” and said it was planning to fight the ban in court.
What the financial mechanics of a Twitter-TikTok combo might look like are unclear. Twitter’s market capitalization, based on its Aug. 7 closing stock price, is $29.38 billion — while TikTok has been valued at about $50 billion by a group of U.S.-based ByteDance investors who were looking to acquire control of TikTok, Reuters reported last month. The Journal reported noted that Twitter “would almost certainly need help” to swing a deal for TikTok.
TikTok lets users create, edit and share videos of 15-60 seconds long. If TikTok became part of Twitter, it would be a second attempt by Twitter to get into the short-form video arena: Its previous, unsuccessful foray came through the 2012 acquisition of Vine — but Twitter shut down the 6-second video app in 2017 after failing to find a business model for it.
Microsoft has said it is looking at acquiring TikTok’s U.S., Canada, Australia and New Zealand businesses, and the tech behemoth also reportedly is considering acquiring all of TikTok’s operations.
TikTok, which is run by former Disney exec Kevin Mayer, says it has 100 million U.S. users and employs more than 1,000 people in the States. TikTok says it does not operate any servers in China proper although its app shares code with Douyin, ByteDance’s sister video app for the Chinese market.
The Trump administration’s actions against TikTok and Tencent-owned WeChat are part of an escalating economic fight between the U.S. and China.
Other government entities and businesses have banned TikTok over concerns that Chinese government authorities could demand access to user data from TikTok.
In June, India banned the app and several dozen other Chinese mobile applications in June, amid a border clash between the two countries. In the U.S., the Department of Homeland Security, the TSA, the U.S. military and Joe Biden’s presidential campaign are among the organizations that have already banned the use of TikTok.
Trump last week said the U.S. government should be “paid a substantial amount of money” under any TikTok sale, “because we’re making it possible for this deal to happen.” Experts have said that a U.S. president requiring any payment as part of such a transaction would be illegal.