Investors of ByteDance, TikTok’s parent company, are seeking to take over the popular social media app. They are valuing it around $50 billion which is significantly more than its rivals such as Snap Inc. Amid pressure from the U.S. to relinquish control, Beijing-based Company is considering several options for TikTok. The app has become widely popular among teenagers around the world which have helped turn ByteDance into a successful Chinese conglomerate.
The U.S. panel review deals have raised concerns for potential national security risks about the safety of the personal data handled under its Chinese owner. ByteDance has received a proposal to transfer TikTok’s majority of stakes to them, from its investors including General Atlantic and Sequoia.
A bid of investors’ on TikTok is valued around 50 times its projected 2020 revenue. However, it is still unclear if Yiming Zhang, ByteDance’s founder, and CEO, will be satisfied with the offer. The company’s management team expects to achieve $6 billion in revenue in 2021 due to the rapid growth of advertising. Earlier, TikTok’s parent ByteDance was valued around $140 billion when Cheetah Mobile Inc, one of its shareholders, sold a small stake.
While there is still uncertainty if ByteDance will agree to any deal but it is pushing structural changes to ringfence the U.S. business. One of its changes might include a new holding company and an independent board for TikTok. On Wednesday, in a blog post, Kevin Mayer, TikTok CEO, said that they are committed to following U.S. laws and they are allowing experts to observe its moderation policies and algorithms.
Last week, the Senate Committee on Homeland Security and Governmental Affairs of the U.S. has unanimously passed a bill that will bar federal employees from using TikTok devices. The House of Representatives has already voted for a similar measure but it will also be taken up by the full Senate for a vote.