Twitter has had preliminary discussions with TikTok making the social media platform the latest likely possible suitor for the popular video-sharing app. However, it is unclear whether Twitter would pursue a possible acquisition of TikTok, and whether the deal would face a lot of hurdles.
This comes after the US President Donald Trump has issued an executive order to ban TikTok in the US in 45 days if it’s not sold by its Chinese parent company. The company is now being forced to either find a buyer or face a ban. TikTok doesn’t have much time to close a deal, and that means being open to offers it wouldn’t have entertained in the past.
The biggest challenge to any deal is the Trump administration’s executive order from August 6th. The order bars TikTok parent company ByteDance from handling transactions in the US.
The administration considers the Chinese-owned app a potential threat to security, despite the fact that there is no evidence indicating that ByteDance or TikTok has shared the US data with the Chinese government.
However, TikTok has remarked that it has plans to challenge Trump’s order. TikTok has threatened legal action against the executive order and is challenging its legality.
So far Microsoft is the only company to acknowledge and agree publicly that it was in talks with TikTok owner ByteDance for a possible acquisition. Microsoft on August 2nd said that its CEO Satya Nadella had spoken to President Trump about a possible acquisition of TikTok, which would also include TikTok operations in the US, Canada, Australia, and New Zealand. Microsoft also said it expected its talks to wrap by September 15th.
It’s unclear whether Twitter will pursue a deal, which would involve TikTok’s US operation. Twitter is a much smaller company in comparison to Microsoft, and the social platform could likely face less antitrust scrutiny than Microsoft. Twitter also doesn’t have as much money as the software giant Microsoft for a possible purchase. Thus, Twitter would be considered as one of the bidders for TikTok, with Microsoft likely taking the front run in the deal.
Any deal with Twitter would involve TikTok’s US operations. Twitter would be unable to outbid Microsoft, and that it would be a difficult task for the social media giant to reach a deal with TikTok within the 45-day period.
Twitter’s market capitalization as per reports is about USD 29 billion, smaller than Microsoft’s about USD 1.6 trillion. Twitter would certainly need help from investors if it buys TikTok.
Twitter had previously acquired Vine, which is a similar video-sharing app, and then shut it down four years later.