Since Congress passed a bill that would force the Chinese company ByteDance to sell or close TikTok, one of the The biggest questions have been: who could buy it, given the technological, political and financial considerations?
Billionaire Frank McCourt has raised his hand.
McCourt said Wednesday that he was working to assemble a group of bidders to buy the social media app. His goal in doing so is to rethink how TikTok, and the internet in general, uses data and considers privacy. He is already in talks about the app with academics and those who study the impact of technology such as Jonathan Haidt, whose book “The Anxious Generation,” about how smartphones have affected the mental health of teenagers, has been on the lists of the best sellers for longer. of one month.
McCourt, a former owner of the Los Angeles Dodgers who made his fortune in real estate, has long been interested in the role of technology and society. He has been on a crusade to remake the Internet and wrest control of user data from tech giants like Facebook and TikTok, establishing an initiative called Project Freedom in 2021 to focus on those efforts.
“This seemed like a great opportunity to really create an alternative to the current Internet, which has been colonized by big platforms, including TikTok,” McCourt said in an interview. He said the deal could help users “control their identity, own and control their data.”
Whether ByteDance can find a buyer for TikTok will be crucial in determining its fate: if it can’t, it may be forced to close in the United States. But a TikTok sale would be hugely expensive, limiting its buyer pool. That’s because most big tech companies would likely face antitrust scrutiny if they tried to acquire the app.
Those challenges haven’t completely dampened interest in one of the world’s most popular social media apps. Steven Mnuchin, former Treasury secretary, made headlines in March for saying he was “trying to form a group to buy TikTok, because they should be owned by American companies.” TikTok’s American investors include Susquehanna Investment Group and General Atlantic.
McCourt’s bid is still in its early stages. He did not name all the people he spoke to about the purchase or explain where he could raise capital for the offering.
There are still many questions about what a TikTok sale would look like. The Chinese government has the power to prevent the sale of TikTok’s valuable algorithm, and operations between TikTok’s US business and those of its parent company, ByteDance, may also be difficult to separate. Given that uncertainty, McCourt said it was too early to discuss a possible valuation. But he is interested in TikTok without its video recommendation technology and has already hired financial advisors from the investment bank Guggenheim Securities and legal advisors from the law firm Kirkland & Ellis.
“We highly doubt China will sell TikTok with the algorithm,” McCourt said. “We are the only bidder that doesn’t want the algorithm because we are talking about a different architecture, a different way of thinking about the Internet and how it works.”
He said there was value in TikTok’s huge user base, its content, the brand and “a lot of technology underneath the algorithm.”
President Biden signed the new law in April, which was quickly passed in Congress after a nearly year-long process behind closed doors. Lawmakers and intelligence officials have expressed growing concern that TikTok poses a national security threat. The company sued the federal government last week and is pursuing a separate legal challenge from TikTok creators, saying it has spent billions to address safety issues and that the law violates the First Amendment.