The clock is ticking on a timeline for a potential deal for a US-based acquisition of the TikTok social media platform, and the Chinese company behind it, prior to a pending American ban on the system, which currently has around 175 million U.S. users.
If one can disregard the pun – maybe a good piece of advice is to pay attention to not only the motivations of all parties, but the possible fallout of a failure to make a deal.
Daniel van Boom at CNet reports today that American President Trump demands that TikTok’s controlling ByteDance company be bought by a “very American firm” within 45 days, or the expiration of that timeline will trigger a ban on U.S. operations of TikTok.
One of the top contenders to take over ByteDance in this kind of shotgun wedding is Microsoft, a U.S. tech company that has been fairly immune from the challenges facing leaders at Apple, Google, Amazon, and, as an added bonus, is as American as apple pie.
In fact, pundits have suggested it would be hard for any of these other companies to take over TikTok due to existing antitrust issues for which Tim Cook and Mark Zuckerberg flew to Washington just last week for hearings.
“Apple says it’s not interested in acquiring TikTok, despite an Axios report that named the company as a potential buyer for the embattled social network,” writes Russell Brandon at The Verge. “The company tells The Verge that there are no talks at present to acquire TikTok, and it has no plans to pursue such a deal.”
In chronicling some of the likely outcomes, Van Boom points out that even if Microsoft takes over, it’s unclear whether data for U.S. operations would ever still reside on the ByteDance company’s servers.
The American aggression takes place in a broader context of escalating and sometimes contradictory actions and indicators of stress between the two global superpowers. In June, American legislators signed off on the Uyghur Human Rights Policy Act, which seemed kind of strange given the media’s allegations that the president informally told Chinese leader Xi Jingping it was okay for him to go ahead with setting up what Americans have called “concentration camps” for the Chinese minorities.
As for the current kerfuffle, the Chinese are calling the merger a “smash and grab” and promising to retaliate, as the US president, meanwhile, asks for the federal government to receive a cut of the acquisition proceeds.
For most investments, a broader and more escalated Cold War between the US and China would seem to be dangerous. Traders and investors of all types are wading into international trade more carefully based on the potential for a quick escalation of trade conflict.
