Microsoft is reportedly in talks to buy TikTok's U.S. operations as President Trump is poised to order Chinese company Bytedance to sell TikTok amid security concerns. U.S. Secretary of State Mike Pompeo said earlier this month that the U.S. was considering banning TikTok and other Chinese social media apps, citing security concerns. Pompeo said that people should download the app only "if you want your private information in the hands of the Chinese Communist Party."
Five of the biggest U.S. tech companies have a total of $580.8b in cash on hand that could be used for acquisitions:
- Microsoft: $136.5b
- Apple: $193.6b
- Google: $121.1b
- Amazon: $71.4b
- Facebook: $58.2b
- TikTok was recently valued at $50b as ByteDance had discussed selling majority stakes to U.S. investors, something we covered last week. The group of possible buyers included Sequoia Capital, General Atlantic, SoftBank, and New Enterprise Associates. ByteDance would continue owning a minority stake.
- Its $50b valuation is 50x its projected $1b in 2020 revenue, compared to peer application Snap which is only worth 15x its projected 2020 revenue.
- TikTok had 46 million downloads in the U.S. in 2019, and the U.S. makes up ~8.2% of all lifetime TikTok downloads, with 165 million U.S. lifetime downloads.
- TikTok left Hong Kong earlier this month, losing its ~150K users, after China passed a new security law banning anti-Chinese acts in the region. The new security law made publicly calling for Hong Kong's independence a crime.
- TikTok has been downloaded over ~2 billion times globally, and in Q1 2020, it had the most downloads for any app ever in any quarter with ~315 million.
- On June 29, India banned TikTok, citing concerns about preserving its sovereignty and security. Since that ban, new downloads of the app have fallen 26%. India was responsible for ~611 million of the ~2 billion lifetime downloads, a 30.3% share of all lifetime downloads. (Chinese Android downloads are excluded from this data because of difficulty in tracking).
- Last week, we wrote about TikTok's new $200m creators fund.