Kevin O'Leary expressed his intention on Tuesday to crowdfund the acquisition of TikTok. This decision comes following the agreement of US lawmakers to impose a ban on the Chinese-owned TikTok unless it is divested. Notable potential buyers besides O'Leary include former Los Angeles Dodgers owner Frank McCourt and Steven Mnuchin.
Kevin O'Leary's Crowdfunding Initiative for TikTok Acquisition
Kevin O'Leary has positioned himself as one of the few individuals interested in purchasing TikTok and has taken a unique approach by making it a collaborative endeavor. The renowned "Shark Tank" investor revealed on Tuesday that he has launched a crowdfunding platform to assess interest in collectively acquiring the social media platform. The website enables individuals to "reserve" spots to become investors in the potential US version of TikTok. At present, the platform is not accepting payments, and reservations merely signify interest.
Democratizing TikTok Through Crowdfunding
If the crowdfunding campaign proceeds, it would be subject to US regulations that restrict investors to individuals earning over $200,000 annually or possessing specific financial qualifications. O'Leary aims to democratize TikTok and transform it into a platform where user data is safeguarded from the prying eyes of foreign adversaries, as stated in a video shared on Instagram.
US Lawmakers' Decision and O'Leary's Bid for TikTok
This announcement follows the recent mandate by US lawmakers to ban Chinese-owned TikTok from US app stores unless it is divested within a year. ByteDance, TikTok's parent company, filed a lawsuit against the federal government regarding the ban earlier this month. Despite this, TikTok has affirmed that it has no intentions of selling the platform.
In March, O'Leary, a Canadian investor, initially expressed interest in acquiring the platform, asserting that TikTok would not face a ban because he would purchase it. He doubted Google or Meta's ability to make the acquisition due to antitrust concerns. O'Leary disclosed that his starting offer would range from $20 billion to $30 billion, representing a substantial valuation decrease based on the company's previous funding round.
Uncertainty Surrounding TikTok's Valuation and Potential Buyers
The newly launched website does not disclose the fundraising target or reveal whether negotiations with TikTok are underway. Various investors, including former Los Angeles Dodgers owner Frank McCourt, former Treasury Secretary Steven Mnuchin, and Bobby Kotick, former CEO of Activision, have expressed interest in acquiring the popular short-form video platform.
Estimates regarding TikTok's value vary significantly, with one valuation suggesting a $100 billion price tag for the US business, while another claims it has negligible impact on ByteDance's revenue. The absence of TikTok's "For You Page" algorithm, credited for the platform's success, could diminish its appeal if sold.
O'Leary's Insights and Background
O'Leary emphasized in March that it seems improbable for the Chinese government to sell TikTok along with its algorithms. Any potential buyer would need to recreate the platform from scratch. Prior to his involvement in "Shark Tank," O'Leary engaged in acquiring and consolidating software companies in the late 1980s and 1990s.
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By: shubhangigoel@insider.com (Shubhangi Goel)
Title: Kevin O’Leary Plans to Crowdfund Buying TikTok Amid US Ban Threat
Sourced From: www.businessinsider.com/kevin-oleary-crowdfund-tiktok-shark-tank-investor-accredited-campaign-valuation-2024-5
Published Date: Wed, 29 May 2024 05:15:38 +0000
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