A note from our editors: An earlier version of this article refers to a debunked Wall Street Journal report regarding untrue allegations against Bobby Kotick. The false allegations originate from a now-dismissed complaint filed by the California Civil Rights Department (“CRD”) in 2021. The CRD, the Journal, and multiple independent investigations have found that claims of systemic sexual harassment at Activision were unsubstantiated, and Mr. Kotick never turned a blind eye toward, ignored, condoned, or tolerated harassment, retaliation, or discrimination or acted improperly with regard to the handling of any instances of workplace misconduct. Additionally, in May 2023, Activision publicly released its inaugural annual Transparency Report, which further confirmed that there has never been widespread or systemic harassment at Activision.
Last week, the U.S. House of Representatives voted 352-65 to pass a bill that would require TikTok to be sold to an owner not based in China or face a ban in the U.S. While the bill still needs to pass the U.S. Senate and get the signature of President Joe Biden, the business community has already started throwing their hat in for a chance to buy the popular short video app.
TikTok’s Chinese parent company, ByteDance, was most recently valued at $268 billion, an unattainable price tag for most solo investors, which is why the handful of people who have expressed an interest are all working on finding co-investors. ByteDance primarily operates two apps, TikTok and Douyin, a Chinese version of TikTok available in mainland China. Wedbush analyst Dan Ives has estimated TikTok could sell for $100 billion, while the Financial Times reported the app could sell for $184 billion, if valued at a Meta-like revenue multiples, or $88 billion, if valued like Snapchat. TikTok’s U.S. arm generated around $16 billion in revenue in 2023, according to the Financial Times.
That said, TikTok doesn’t necessarily need to be fully acquired. The pending bill leaves room for Bytedance and its Chinese investors to retain up to 20 percent of TikTok. Bytedance currently has 60 percent of its equity owned by outside investors, including U.S.-based General Atlantic, Coatue and Sequoia Capital.
Here are the top contenders for the video app if the TikTok bill becomes law:
Steve Mnuchin, private equity investor and former Treasury Secretary
Mnuchin served as the U.S. Treasury Secretary under former President Donald Trump. But before entering politics, he had served as the chief information office for Goldman Sachs and founded several hedge funds. Following’s the House vote last week, Mnuchin announced that he’d started gathering a team of investors to explore buying TikTok from ByteDance.
A lesser known part of Mnuchin’s resume is his history in the media and entertainment industry: he is an executive producer behind Hollywood hits Mad Max: Fury Road and The Lego Movie and helped finance numerous 20th Century Fox movies, including Avatar. Currently, Mnuchin leads Liberty Capital Management, a private equity fund that raised $2.5 billion by September 2021, months after his departure from the Trump administration. Last fall, Liberty Capital invested $30 million to acquire a 5.5 percent stake in the movie studio Lionsgate.
Bobby Kotick, former CEO of Activision Blizzard
Kotick, who retired from Activision Blizzard in December 2023 after 32 years at the helm, is reportedly seeking to buy TikTok with a group of investors that could include OpenAI CEO Sam Altman.
Kevin O’Leary, venture capitalist
Dubbed “Mr. Wonderful,” the celebrity investor from Shark Tank said in an interview with “Fox & Friends” earlier this month that he would consider buying TikTok. O’Leary promised to “close the Chinese back doors in the code” and make the app “safe for the users, the parents, small business and large business.” However, O’Leary, who reportedly has a net worth of $400 million, would not be able to finance the acquisition himself. His fund, O’Leary Ventures, which focuses on investing in early-stage founders and start-ups, does not publicly disclose its total assets under management or access to capital.
Chris Pavlovski, CEO of Rumble Video
Rumble is a video streaming platform and cloud service provider known for hosting former President Trump’s social media app Truth Social. The company on March 12 posted on X a letter from its CEO Chris Pavlovski to TikTok CEO Shou Zi Chew expressing an interest in joining “a consortium with other parties seeking to acquire and operate TikTok in the United States.”
Rumble, however, boasts a modest market cap of just over $2.1 billion. It is unclear if Rumble has engaged other investors or companies to raise the capital needed to complete a TikTok acquisition. Rumble did not immediately respond to the Observer’s request for comment.
An offer for TikTok from our CEO @chrispavlovski pic.twitter.com/lIeZ6IXANU
— Rumble 🏴☠️ (@rumblevideo) March 12, 2024
Microsoft, Oracle or Walmart
In 2020, when former President Trump led a similar campaign to ban TikTok in the U.S., then Bytedance CEO Zhang Yiming looked to Microsoft as a potential buyer. However, Microsoft CEO Satya Nadella suggested the interest was one-sided. “Tiktok came to us. We didn’t go to TikTok,” he said during a conference in 2021. The deal ultimately fell through after Microsoft insisted on acquiring the whole of TikTok’s U.S., Canada, Australia and New Zealand businesses, including full control of data, source code, and algorithms.
Later, the Trump administration approved a deal that would spin off Bytedance’s U.S.-based TikTok operations as a new company called “TikTok Global,” of which Walmart and Oracle would own 20 percent. This deal would have allowed Bytedance and its major investors to retain equity in the newly formed U.S. entity. However, upon the Biden administration entering power, the executive orders were reversed and the deal fell through.
Since 2023, Bytedance has had TikTok’s U.S. operations use Oracle to host and oversee all U.S. data. TikTok CEO Chew led this effort to alleviate concerns about data privacy from U.S. regulators.
Oracle, Walmart, and Microsoft have not publicly shown interest in renewing a deal since the House passed the TikTok bill.