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TikTok needs a US buyer so bad it might seek out Elon Musk

Analysis by Allison Morrow, CNN
 
A Muskified TikTok would likely look different from the app millions of Americans know and love.
 A Muskified TikTok would likely look different from the app millions of Americans know and love.  Brook Joyner/CNN 
A version of this story appeared in CNN Business’ Nightcap newsletter. To get it in your inbox, sign up for free here.
New York (CNN) — Americans are going to lose access to TikTok in less than a week, unless China green-lights a sale to what Congress has deemed a non-adversary of the United States — something China is unlikely to do but might. In theory.

There are a few scenarios floating around as we barrel toward the January 19 deadline, including one that would hand control of TikTok’s US operations to your weird uncle’s favorite MAGA oligarch, Elon Musk.

See here: Bloomberg and The Wall Street Journal reported that Chinese officials are weighing a scenario in which TikTok’s Beijing-based parent company, ByteDance, would spin off the app’s US operations to Musk, an investor they already know and who has already made a mark on the social media world by gutting one of the most influential sites ever created.

To be clear: CNN couldn’t independently confirm Bloomberg or the Journal’s reporting;TikTok batted down the speculation, and ByteDance has previously said the app is not for sale. But such a tie-up could make sense, at least on paper, for a few reasons:

  1. Musk, and by extension President-elect Donald Trump, gets to play the hero to a whole generation of young social media users. At least until he Muskifies the platform the way he did with Twitter (more on that in a moment).
  2. China would be able to put TikTok’s US operations — likely not including the company’s all-important proprietary algorithm — in the hands of someone its government already has leverage over. (Roughly 40% of Tesla’s EV sales come from Chinese consumers.)
  3. It could be a way to pull X out of the gutter. In short, TikTok is cool; X is not. X is hemorrhaging users and advertisers while TikTok is expanding rapidly. (Analytics firm Emarketer said it expects TikTok to bring in $15.53 billion this year in the US alone, a 26% jump year over year.)

TikTok fans would be wise to keep the Champagne on ice, however.

It is far from clear whether Musk would be able to strike a deal that satisfies all stakeholders by Congress’ deadline — or whether such a sale could overcome regulatory hurdles, Emarketer senior analyst Minda Smiley wrote in an email Tuesday.

Even if a deal were to happen, it’s likely that a Muskian TikTok wouldn’t be the same TikTok we know today.

“TikTok would likely look much different under Musk — just look at Twitter’s drastic transformation to X under his control,” Smiley wrote. “And considering TikTok’s algorithm is unlikely to be part of any sale, the app will likely look much different regardless of who owns it, should a deal go through.”

TikTok creators, many of whom have built their livelihood on the app, desperately want to keep the lights on. But so far, there isn’t a widely agreed upon alternative.

Many are migrating to other Chinese-owned apps Lemon8 (which is also owned by ByteDance) and RedNote, an Instagram-like app that’s popular in China.

Some are migrating to Instagram Reels — the TikTok knockoff that Meta launched as a competitor in 2020 — though many TikTok purists treat that option as a nonstarter.

“I’d rather move to China than Instagram Reels” is a common sentiment on the platform lately.

While Reels and TikTok may look similar, the user experience and community vibes are wildly different.

TikTok users tend to look down their nose at Reels because it tends to be a dumping ground for recycled videos that have already come and gone on TikTok, for a start.

The comments section is another area where TikTok culture stands apart — users tend to take pride in posting funny or insightful comments, which often take on a life of their own. Creators on TikTok describe their experience with comments on Reels as banal at best, and straight-up mean at worst.

TikTok users tend to value humor and originality while discouraging trolls. That could change under a Musk-run TikTok that’s merged with X, a site that’s become a haven for people who think they’re smarter and funnier than they are.

Meanwhile, Tesla investors may not be thrilled about Musk absorbing yet another social media platform after he shelled out $44 billion on X more than two years ago. Musk is a busy guy — the father of at least 11 children, the CEO or owner of at least six companies, a constant presence at President-elect Donald Trump’s Mar-a-Lago transition office and the co-head of a toothless advisory on government efficiency. But the job that’s made him the world’s wealthiest person is running Tesla, the only publicly traded company Musk owns.

I asked Dan Ives, a Wedbush Securities analyst and longtime Tesla bull, whether the TikTok prospect would rattle investors who’ve already expressed concerns about the CEO’s extracurricular activities.

Ives noted that while there are clearly risks, acquiring TikTok could double X’s value, which has cratered by an estimated 80% since Musk took the company private.

And despite the risks, Ives said, “the bromance between Musk and Trump is a major win for Musk… as tech stalwarts are vying for power.”

He added: “It’s a soap opera that will likely have many twists and turns with January 19th coming quick.”

Author: Editors Desk

Source: CNN:::

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