The U.S. threat to Chinese technology companies escalates again! Mr. Trump told reporters on July 31 at his jet, Air Force One, that he would ban TikTok from operating in the United States as early as Saturday ( August 1 ) , and indicated that he would not support U.S. companies buying TikTok . It was the second government crackdown on TikTok in the US in a week, and this week the Treasury department submitted its review.
In fact, since the end of last year, TikTok has faced a so-called national security review by the US Treasury-led COMMITTEE on Overseas Investment (CFIUS), which focused on Byte Dance’s 2017 acquisition of Thetto’s predecessor, Musical.ly.
It follows news that Microsoft could buy TikTok’s US business, which is valued at $50bn. But with Mr. Trump’s latest announcement, TikTok’s U.S. operations are facing a new transformation.
In the domestic capital markets, investors are eagerly awaiting the listing of Byte Dance as soon as possible, and even individual investors expect the company’s valuation to be matched by Tencent’s 5 trillion yuan market value. On July 31st Byte Dance, the parent company of The Voice and today’s headlines, was once again announced that it would consider launching a domestic listing, possibly in Hong Kong or Shanghai, or in Hong Kong, and bybyDance, which would also consider listing its non-China business in Europe or the US. However, in response to a broker’s China interview on the afternoon of August 1st, Byte Dance said it would “not comment on market rumors”.
Trump bans TikTok as soon as August 1st?
Mr. Trump told reporters on July 31 at his jet, Air Force One, that he would ban TikTok from operating in the United States.
“When it comes to TikTok, we’re banning them from operating in the United States.” “I have the power, I can use executive orders… In other words, we want to ban (TikTok operates in the United States) and we want to ban it. Media reports said Mr. Trump’s comments were an allusion to his support for a U.S. company’s acquisition of TikTok. Mr. Trump also said he would ban TikTok from operating in the United States “as early as Saturday, August 1.”
Not long ago, Mr. Trump said he planned to order the sale of the ownership of TikTok’s U.S. business by Beijing-based Byte Dance Technology Co., Ltd.
“We’re looking at TikTok, and maybe we’re going to block it in its own right, or we’re going to do something else,” Mr. Trump told reporters as he prepared to travel to Florida. “
In response to calls for TikTok to sell, Mr Trump said: “We may be banning TikTok, or we may be doing something else.” There are a lot of options, but a lot of things are happening, so we’ll see what happens. We are looking for many alternatives to TikTok. “
The containment has intensified, and the Us Treasury has just submitted a review proposal.
TikTok has faced increasing regulatory pressure in the US since the end of last year, with the US Treasury-led CFIUS playing a key role in its review of Byte Dance’s 2017 acquisition of Music.ly, TikTok’s predecessor.
In November 2019, U.S. lawmakers called for a so-called “national security investigation” into TikTok. At the time, the U.S. Treasury Department launched a so-called “national security investigation” into the $1 billion acquisition of social media app Music.ly by Byte Dance, the parent company of TikTok, two years ago.
Data show that Music.ly went online in 2014 and is a product of Shanghai Learn Network, which is developing mainly in overseas markets such as Europe and the United States. In August 2018, Music.ly and TikTok, the international version of Sound, were officially merged, and the new product was extended to the latter name.
CFIUS is the U.S. government’s interagency body responsible for reviewing foreign investment mergers and acquisitions, led by the Treasury Department, which is at the heart of whether foreign investment poses a threat or potential threat to U.S. national security. Two years ago, ByteDance did not seek CFIUS approval for the acquisition of Music.ly, which now gives the committee reason to review it, but the review process and details will not be made public given the “national security issues”.
In early July 2020, Mr. Trump said he was considering banning TikTok in the United States, including by including adding TikTok to the List of U.S. entities. And a review by the U.S. Overseas Investment Committee (CFIUS) over Byte Dance’s 2017 acquisition of TikTok’s predecessor, Music.ly, will force Apple and Google App Stores to take off TikTok, or push TikTok and Byte Dance to spin off.
On July 29, 2020, U.S. Treasury Secretary Jim Mnuchin, the superior son of CFIUS, confirmed that he would submit a proposal to President Trump that week to determine whether the deal involved national security risks. Around this news, themedia began to focus on the latest developments in ByteDance. Bloomberg reports that the Trump administration may ask Byte Dance to sell its U.S. business. Other New York newspapers reported that Microsoft was in talks with The Overseas Edition about the acquisition.
The valuation has reached $50 billion, Microsoft wants to take over?
“While we do not comment on rumours or speculation, we are confident of the long-term success of TikTok,” the company said in a statement. Hundreds of millions of people come to TikTok for entertainment and interconnection, including our community of creators and artists, who are making a living from the platform. Inspired by their passion and creativity, we are committed to protecting their privacy and security, as we continue to strive to bring joy to countless families and to bring meaningful careers to those who create on our platforms. “
It follows reports that some byteDance shareholders have valued TikTok at $50bn, 50 times Its 2020 revenue estimate of $1bn. According to public reports, most of these negotiations are overseas investment institutions, including Sequoia Capital, Transatlantic Investment Group and others.
But that $50 billion valuation seems to be understated! In recent weeks, some private equity firms have valued Byte Dance’s equity, already giving a sky-high $150billion. In addition,media said that a technology giant has also expressed interest in buying TikTok’s U.S. business, the giant Microsoft.
Some analysts believe that if Byte Dance had to sell Its TikTok’s U.S. business, Microsoft might be the most suitable person. Because, in the light of the recent Antitrust Investigation into the tech giant in the United States, a combination of Microsoft and TikTok could create a powerful digital advertising giant outside of Google’s parent company Alphabet and Facebook, making the market more dynamic, rather than being in the hands of a handful of companies. In addition, Microsoft, which has a market capitalisation of about $1.5 trillion and enough cash reserves on hand, can easily pay for acquisitions rather than, unlike other companies, to raise money for acquisitions.
In the domestic capital markets, investors are eager for Byte Dance to go public as soon as possible, and even some expect its valuation to be matched by Tencent’s 5 trillion yuan market value. On July 31st Byte Dance, the parent company of The Voice and today’s headlines, was once again announced that it would consider promoting a domestic listing, possibly in Hong Kong or Shanghai, or in Hong Kong, and bybyteDance, which is also considering options for listing non-Chinese businesses in Europe or the US. In response to this, ByteDance on August 1 to the broker China reporter said, “on the market rumors, do not comment.”
In fact, ByteDance has more than once come out with “gossip” about going public. As early as July 2018, it was reported that ByteDance would consider an IPO in Hong Kong, in response to the company’s response that “there are no plans or arrangements for listing at this time”. Now, news of TikTok’s U.S. operations or forced sale is once again pushing the company’s listing pace to the fore.
On July 31st, a large outbreak occurred in the ByteDance concept unit, as news spread. Statistics show that ByteDance concept shares a total of 58, an average increase of 3.93%, of which 10 rose and stopped (Tianzheng Fashion, Gravity Media, Xuanya International, Chinese Online, Jiayun Technology, Tianlong Group, Global Printing, Meisheng Culture, Caesar culture, provincial wide group). From the industry distribution, most of these so-called throtting concept stocks come from the three major industries, namely, marketing services, Internet services, computer software industry.
However, it should be noted that ByteDance told the media on June 18th that recent rumours about “ByteDance, Today’s Headlines, Sounding Concept Unit” in the capital markets were exaggerated or even false, such as overstating ordinary advertising agencies and regular business dealings as strategic cooperation. Please the vast number of investors to invest prudently, pay attention to risk prevention and control.
On July 29th the official announcement said that Hatvi, the company’s technology equity firm, had exaggerated the disclosure and canceled all cooperation with it. Prior to the baotong technology market value rose by more than 2 billion yuan, after the announcement of the fall and stop. The Shenzhen Stock Exchange quickly re-issued a letter of concern at noon on July 31st, asking it to explain whether the company had a “hot spot” speculation on the stock price.
Can TikTok get away with it? Zuckerberg was accused of pretending to be patriotic.
Behind the scrutiny by the U.S. government is the rapid rise of TikTok around the world. Especially in the first few months of this year, the rapid growth of the epidemic demand for entertainment, so that TikTok downloads nearly doubled in the first quarter, the world’s downloads exceeded 2 billion. In the first quarter of this year, about 315 million users downloaded TikTok, the largest download of an app in a single quarter, with more than 2.2 billion downloads worldwide, according to research firm Sensor Tower.
In February, TikTok set a monthly record with 113 million downloads, In March, TikTok officially surpassed 1 billion users worldwide, in April it surpassed 2 billion, and in May, TikTok remained the world’s most downloaded app.
Such explosive growth has led to more intense competition in the market, and even the next three methods of individual companies. The U.S. has just called a monopoly hearing for several Internet giants, including Facebook’s CEO, Google’s CEO, Apple’s CEO and Amazon’s. “Do you believe that China has stolen technology from the United States?” asked one lawmaker. The other three CEOs denied the problem, only Zuckerberg was adamant: “Yes! I think China is absolutely stealing technology from the United States.”
Zuckerberg was at the meeting, claiming that Chinese-led apps are exporting their vision to other countries, threatening U.S. security, and that Facebook is key to the U.S. winning an “cyber arms race” with China.
Of course, the CEO of TikTok hit back at Zuckerberg, who he believes is pretending to be patriotic in order to allow his company to dominate the short-term video market. Because Facebook’s Instagram just recently announced a “new” feature called Reels, not only the cottage TikTok, but also ready to poach a lot of the original TikTok on the big-traffic network celebrities, to blatantly and TikTok to steal people.
But TikTok didn’t concede. On July 23rd TikTok will create a $200 million special fund to support original video production costs to retain talent. It is reported that creators who want to apply for funding must be at least 18 years old and that the content that is always published complies with the TikTok community guidelines and must be original video. The number of fans is also an important application criterion, but TikTok has not said how many fans it needs.
According to Vanessa Pappas, general manager of TikTok, through the TikTok Creators Fund, creators will be able to earn more revenue that reflects the time, energy and dedication they put into connecting with their audience.