The End of TikTok?
Since we have been speaking about postponements, once again the President signed an Executive Order giving TikTok (pvt) another 75 day extension to finalize a deal to remove itself from its Chinese owners. One might remember that the first 75 day extension came on Trump’s inauguration day when the original ban (Biden) and Congressional actions were to go into effect. The President recently stated, “The Deal requires more work to ensure all necessary approvals are signed, which is why I am signing an Executive Order to keep TikTok up and running for an additional 75 days.”, as his initial extension was to expire on April 5.
That said, it seems that while the WH hints that at least four groups are currently under consideration to purchase the app, which is used by over 170m Americans, there has been little about who might be high in the running. At one point last year it was thought that Oracle (ORCL) might be close to a deal, but the Chinese government indicated it would not approve the Ellison deal at that time. Since then Frank McCourt, former owner of the LA Dodgers, has been mentioned, as well as Perplexity AI (pvt), a variety of VCs and private funders, and more recently Amazon (AMZN), who has been trying to build a media presence (Bought Goodreads (pvt) in 2013 and Twitch (pvt) in 2014), but recently closed their short-form platform ‘Inspire” after ~2 years.
While the most recent postponement, which is again in violation of the congressional law (Trump promised not to prosecute those involved), is delaying the finality of a deal, there still seem to be a few loose (very loose) ends that are keeping things up in the air. Trump fired David Feith, the Senior Director for Technology & National Security at the National Security Council, who was a key negotiator in the TikTok deal, which set back the conversations with the Chinese government, and even more recently the additional tariffs placed on Chinese imports cooled negotiations even further. That said, even more recently another bidder seems to have appeared, and while the US government might not take this new bidder seriously, he certainly has credentials.
The new bidder is Only Fans (pvt) porn site founder Tim Stokely, who sold a 75% stake in the site in 2018 (sales of $6.6b in 2023). Along with the HBAR Foundation (pvt), who runs the Hedera block-chain network, Stokely is looking to create another profit-sharing model like Only Fans, where those willing to post explicit videos are able to rake in thousands a day for a popular pay channel. Hopefully the administration will not take the Stokely bid seriously, as the potential for such a model to destroy the public value of TikTok is quite high, but there is still another stumbling block that we see as an even greater risk to any potential TikTok deal.
As the Chinese government has to approve the sale, the current atmosphere between the Trump administration and the Chinese government is a bit tense, and we expect the Chinese government will try to use TikTok to gain some leverage in the tariff debacle. Trump can easily hold out with this most recent extension, but as such a high visibility deal, it will become embarrassing to extend it again, especially if existing tariffs continue to put excessive pressure on the US economy.
We expect the Chinese government will use the TikTok deal as a negotiating tool, but as China seems to be the easiest target for Trump’s ‘Big Stick’ agenda, we don’t believe the deal leverage has much chance of making an appreciable difference in trade negotiations. That means either no TikTok deal and a shutdown, which would be an embarrassment to the administration, or some concession on the US side, likely something easily buried in the publicity rhetoric that would surround a deal. (“…we saved TikTok for the good of America”. It has become a messy situation that has gotten even messier with the Stokely bid, but there are bigger things to worry about than TikTok at the moment, at least until the middle of June when the deal is slated to be completed. As long as Stokely’s bid is not accepted, TikTok lives on, despite the efforts of the government to ‘protect’ our TikTok videos from being seen by the Chinese government…
https://www.tiktok.com/@creamycanoli/video/7350849230010928430?is_from_webapp=1&sender_device=pc
https://www.tiktok.com/@biogenesis__/video/7478422860545969430?is_from_webapp=1&sender_device=pc
https://www.tiktok.com/@shiverchain/video/7468920864952552726?is_from_webapp=1&sender_device=pcc
https://www.tiktok.com/@wufudufu/video/7253693814928379178?is_from_webapp=1&sender_device=pc
These are all real TikTok videos…don’t let anyone in the Chinese government see them!
That said, it seems that while the WH hints that at least four groups are currently under consideration to purchase the app, which is used by over 170m Americans, there has been little about who might be high in the running. At one point last year it was thought that Oracle (ORCL) might be close to a deal, but the Chinese government indicated it would not approve the Ellison deal at that time. Since then Frank McCourt, former owner of the LA Dodgers, has been mentioned, as well as Perplexity AI (pvt), a variety of VCs and private funders, and more recently Amazon (AMZN), who has been trying to build a media presence (Bought Goodreads (pvt) in 2013 and Twitch (pvt) in 2014), but recently closed their short-form platform ‘Inspire” after ~2 years.
While the most recent postponement, which is again in violation of the congressional law (Trump promised not to prosecute those involved), is delaying the finality of a deal, there still seem to be a few loose (very loose) ends that are keeping things up in the air. Trump fired David Feith, the Senior Director for Technology & National Security at the National Security Council, who was a key negotiator in the TikTok deal, which set back the conversations with the Chinese government, and even more recently the additional tariffs placed on Chinese imports cooled negotiations even further. That said, even more recently another bidder seems to have appeared, and while the US government might not take this new bidder seriously, he certainly has credentials.
The new bidder is Only Fans (pvt) porn site founder Tim Stokely, who sold a 75% stake in the site in 2018 (sales of $6.6b in 2023). Along with the HBAR Foundation (pvt), who runs the Hedera block-chain network, Stokely is looking to create another profit-sharing model like Only Fans, where those willing to post explicit videos are able to rake in thousands a day for a popular pay channel. Hopefully the administration will not take the Stokely bid seriously, as the potential for such a model to destroy the public value of TikTok is quite high, but there is still another stumbling block that we see as an even greater risk to any potential TikTok deal.
As the Chinese government has to approve the sale, the current atmosphere between the Trump administration and the Chinese government is a bit tense, and we expect the Chinese government will try to use TikTok to gain some leverage in the tariff debacle. Trump can easily hold out with this most recent extension, but as such a high visibility deal, it will become embarrassing to extend it again, especially if existing tariffs continue to put excessive pressure on the US economy.
We expect the Chinese government will use the TikTok deal as a negotiating tool, but as China seems to be the easiest target for Trump’s ‘Big Stick’ agenda, we don’t believe the deal leverage has much chance of making an appreciable difference in trade negotiations. That means either no TikTok deal and a shutdown, which would be an embarrassment to the administration, or some concession on the US side, likely something easily buried in the publicity rhetoric that would surround a deal. (“…we saved TikTok for the good of America”. It has become a messy situation that has gotten even messier with the Stokely bid, but there are bigger things to worry about than TikTok at the moment, at least until the middle of June when the deal is slated to be completed. As long as Stokely’s bid is not accepted, TikTok lives on, despite the efforts of the government to ‘protect’ our TikTok videos from being seen by the Chinese government…
https://www.tiktok.com/@creamycanoli/video/7350849230010928430?is_from_webapp=1&sender_device=pc
https://www.tiktok.com/@biogenesis__/video/7478422860545969430?is_from_webapp=1&sender_device=pc
https://www.tiktok.com/@shiverchain/video/7468920864952552726?is_from_webapp=1&sender_device=pcc
https://www.tiktok.com/@wufudufu/video/7253693814928379178?is_from_webapp=1&sender_device=pc
These are all real TikTok videos…don’t let anyone in the Chinese government see them!
RSS Feed