The Supreme Court is currently deliberating on TikTok's future in the United States, as Chinese owner ByteDance faces a decision on January 19th to either divest its US business to an American owner or face a ban. Chairman of O'Leary Ventures Kevin O'Leary, one of the individuals teaming up with Project Liberty to buy the social media platform, joins Catalysts to discuss the details.
O'Leary notes ByteDance has an algorithm-free option to sell, adding that "it was widely believed in the market that no bidders would buy it if the algorithm wasn't for sale."
"We wanted to make it clear as they debate... that we are a buyer, we've got a valid syndicate, we're prepared to put up as much as $20 billion, and we don't need the algorithm, we don't want the algorithm," he states, explaining that the algorithm, which he calls "Chinese spyware," is the primary reason for the potential shutdown.
O'Leary advocates for TikTok's business benefits, including its impact on his own ventures, saying, "Certainly for me, the majority of my companies, up to 60% of their digital spend each week is on TikTok. It's a very effective platform, and I want to make sure as an advocate for American entrepreneurship that we keep it lit up."
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He believes a successful sale is likely because losing the US TikTok segment would significantly impact ByteDance's valuation. "10-15% of its value is inside TikTok USA, and so if all of a sudden they just shut it off... you're erasing about $38-40 billion worth of value from me as a shareholder just because the supreme leader had a bad hair day, just didn't want to play ball."
Regarding the timing, O'Leary acknowledges the complexity of negotiating during a presidential transition, stating, "I've never been in a more complicated deal in my life, but it is a legacy opportunity."
"We know we have to work with both administrations," O'Leary tells Yahoo Finance, adding, "This is a bipartisan effort." He emphasizes that approximately 6-7 million small businesses on TikTok generate nearly $10 billion in revenue, with both Democratic and Republican business owners participating because, ultimately, they're "American entrepreneurs. " He adds, "I care a lot about them. I don't care about the politics."
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This post was written by Angel Smith