Twitter Wants to Buy TikTok Now
Muhammad Mubeen Javed
President Donald Trump signed an executive order. It gave ByteDance 45 days to strike a deal regarding TikTok’s US operations. The application has been at the center of fierce debate.
Twitter Inc. ha approached TikTok’s Chinese owner ByteDance with a proposition to acquire the application’s US operations. The social media platform will not be able to outbid Microsoft in the said deal considering Twitter’s ability to put together financing in the 45 days that US President Donal Trump has given ByteDance to agree to a sale.
Microsoft is the front-runner in the bidding for the app’s US operations. Twitter has a market capitalization of close to $30 billion, according to the Wall Street Journal. It is as much as the valuation of said TikTok’s assets. Twitter will have to raise additional capital to fund the deal.
Professor at the University of Michigan, Erik Gordon, said:
Twitter will have a hard time putting together enough financing to acquire even the US operations of TikTok. It does not enough borrowing capacity. Twitter tries to put together an investor group, the terms will be tough. Twitter’s own shareholders might prefer that management focus on its existing business.
The companies have declined to comment on the matter. Twitter believes that its bid would face less regulatory scrutiny than Microsoft’s. it will not face any pressure from China, given that it is not active in the country. Nevertheless, time will tell what course the deal takes. Stay tuned for more updates.