Why that $14 billion TikTok deal may not be what it seems

"But now we have a possible explanation: That $14 billion valuation isn't the real number - at least not to ByteDance, the Chinese company that owns TikTok globally and would be ceding control of its US business. Bloomberg reports that ByteDance would get at least 50% of US TikTok's profits if the deal goes through - despite the fact that in the new structure, it would only own 20% of the spun-off company."

"I've asked the White House, TikTok, and ByteDance for comment. It's important to note that this is not a done deal, and the Chinese government has yet to confirm that it's agreed to it. But if that report is correct, it goes a long way toward solving the puzzle the Trump administration posed on Thursday, when it floated that $14 billion number. Because $14 billion seems like a crazily low price for one of the most powerful media platforms in the US."

Vice President JD Vance presented a plan valuing the US portion of TikTok at $14 billion, a figure that appears far too low compared with other tech valuations and reported revenues. Bloomberg reports suggest ByteDance would nonetheless receive at least 50% of US TikTok's profits via license fees and profit distributions, while owning only 20% of the spun-off company. The Bloomberg item lacks a byline, and the arrangement has not been confirmed by the Chinese government. Officials from the White House, TikTok, and ByteDance have been asked for comment. The proposal remains unfinished and speculative.

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