TikTok's potential sale is facing major delays due to legal and tariff-related issues. O'Leary Ventures chairman Kevin O'Leary joins Catalysts to explain details of the deal's complexity, noting that it is likely to receive another extension.
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Kevin, I want to end on TikTok. Both President Trump and Vice President JD Vance say a deal to sell the app will be reached before this weekend's deadline. And then on Air Force One, President Trump said tariffs on China could be part of that negotiation. Take a listen.
We have a situation with TikTok where China will probably say we'll approve a deal, but will you do something on the tariff? The tariffs give us great power to negotiate.
So if tariffs and TikTok are now getting tied by the president, where does that put your bid for TikTok in terms of your negotiation power? Where does your bid stand right now?
Well, there's many bids. There's no question that there's a deal for TikTok on the table, and that will get one thing with certainty. Tomorrow before midnight, an extension. My guess is 90 days. It'll be punted down the road because the details of the TikTok deal are very difficult. Let me explain two big issues. China has not said what they want to do yet. The current idea is to get a copy of the code and make an American version of it. And we're not sure that passes muster with the law if you can download anybody in America can go get the Supreme Court order. The top of page five makes it very clear you can't use the Chinese algorithm. So what we're going to have to do, if that's the plan, is get an indemnification from Congress or change the law to make it legal to use that. And that would require 51 votes in changing it, and maybe they could slip it into the reconciliation act. All of these are unknowns. But right now, the penalty would be about $820 billion. That's 5,000 per user account per 24 hours times 172 million. And no one, no capital stack of any of the syndicates formed can take that risk. So we need clarity on what's allowed and what isn't based on the law that was passed by Congress and the Supreme Court order. Remember, it was nine to zero. There was no ambiguity in it. And so somebody has to figure that out and either give financiers, both the debt and equity structures, some kind of indemnification against that penalty coming back because, remember, that law will last long past Trump's administration. So if you have an ambitious attorney general that perhaps is a Democrat, you'll get sued for $800 billion. Nobody can afford that. So we've got to solve that problem. We got to figure that out. So these are the things that we're going to have to get worked out in the next 90 days to get this deal done.
Yeah.