TikTok is set to be effectively banned from the U.S. in just over a month.
What you need to know
- Twitter also wants to buy TikTok’s U.S operations according to a report from the Wall Street Journal.
- If a deal is to be made, the company would have to work with other suitors like Microsoft to successfully buy the beleaguered social media business.
- For its part, TikTok is preparing to sue the U.S. government as early as Tuesday, August 11th.
It’s not just Microsoft, Twitter is also one of the U.S. tech companies vying to save TikTok’s U.S operations before the company is forced to leave the country in just under 45 days, the Wall Street Journal reports.
While other tech companies like Facebook or Google could be powerful partners (Apple has expressed its disinterest), they already face enough antitrust concerns such that acquiring and absorbing another tech company into them would be politically unfeasible.
As per the Journal’s report, Twitter sees itself as able to escape this due to its size:
Because it is much smaller, Twitter has reasoned that it would be unlikely to face the same level of antitrust scrutiny as Microsoft or other potential bidders, said people familiar with the discussions.
Still, Twitter is seen as a long-shot bidder, and would almost certainly need help from other investors if it does buy TikTok’s U.S. operations. The company has far less financial firepower than other major tech players. Twitter started making a consistent profit in the past couple of years, but reported a $1.23 billion loss in the latest quarter. Twitter reported $7.8 billion in cash and short-term investments as of June.
Other companies either in tech or venture capital circles like Softbank and Sequoia Capital are also invested in the fate of TikTok and have offered to take the reins of the U.S. business in order to stave off the incoming ban. “One person involved in the deal said “everyone and their mother has been calling,” the Journal reported. Microsoft remains the front-runner at this time, but the company has also expressed willingess to work with other interested U.S. investors on a minority basis.
That said, TikTok isn’t about to sit there and wait for an American savior. It’s gearing up for a legal battle with the U.S. government, TikTok already threatened to sue the U.S. government, but a new report says that the company will do so as soon as Tuesday. Reported by NPR this weekend, the company will argue that the government’s TikTok ban is unconstitutional and the natural security justification baseless.
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