TikTok Being Sold for a Song

"$14B. It's a number so comically low that it would seem more believable if it was what one entity was paying for 10% of the company. But no, everyone is reporting the same thing: $14B is the amount being paid for 100% of the new company. Well, technically they're paying less than that because of the just under 20% being retained by ByteDance, while current ByteDance investors get to roll stakes over (while also putting some new money in)."

"ByteDance itself is worth north of $300B - with secondaries currently trading in the $400B range. Yes, there's more to ByteDance than TikTok, but it's a huge part of the value. And yes, this is just the US portion of the service being sold, but it's also undoubtedly the most lucrative part given the importance and usage in the American market."

"Even $30B to $35B feels comically low here. ByteDance's overall revenue was $155B last year and again, TikTok drives a large portion of that - and presumably most of the international sales, which were just under $40B. Again, just the US business is going to be a large portion of that, but even the most conservative estimates there think it's north of a $10B a year business right now. So these investors are paying something like a 1x multiple which is absolutely silly."

An executive order approved a proposal to keep TikTok operating in the U.S. with Vice President JD Vance citing a $14 billion valuation for the new U.S. entity. The deal reportedly leaves just under 20% with ByteDance while current ByteDance investors roll stakes and add new equity. ByteDance is valued north of $300 billion with secondaries near $400 billion, and analysts have placed TikTok U.S. between $30 billion and $35 billion. ByteDance reported roughly $155 billion in revenue last year, with international sales near $40 billion; the U.S. business alone likely exceeds $10 billion annually, making a roughly 1x multiple appear extremely low.

Read at Spyglass