TikTok’s US unit could be worth as much as $50 billion in a sale

Business moguls like Elon Musk should be prepared to spend tens of billions of dollars on TikTok’s US operations if parent company ByteDance decides to sell.

TikTok is staring at a potential ban in the US if the Supreme Court decides to uphold a national security law where service providers such as Apple and Google would be penalized for hosting the app after Sunday’s deadline. ByteDance has not indicated it will sell the app’s U.S. unit, but the Chinese government has considered a plan in which X owner Musk would take over operations as part of several scenarios under consideration, Bloomberg News reported Monday.

If ByteDance decides to sell, potential buyers may have to spend between $40 billion and $50 billion. That’s the valuation CFRA Research Senior Vice President Angelo Zino has estimated for TikTok’s US operations. Zino based his valuation on estimates of TikTok’s US user base and revenue compared to competing apps.

TikTok has about 115 million monthly mobile users in the US, slightly behind Instagram’s 131 million, according to an estimate by the market intelligence firm Sensor tower. That puts TikTok ahead Snapchat, Pinterest and Redditwhich have US monthly mobile user bases of 96 million, 74 million and 32 million, according to Sensor Tower.

However, Zino’s estimate is down from the more than $60 billion he estimated for the entity in March 2024, when the House passed the first national security bill, which President Joe Biden signed into law the following month.

The lowered estimate is due to TikTok’s current geopolitical predicament and because “industry multiples have come in a bit” since March, Zino told CNBC in an email. Zino’s estimate does not include TikTok’s valuable recommendation algorithms, which a US acquirer would not obtain as part of a deal where the algorithms and their alleged ties to China are central to the US government’s case that TikTok poses a national security threat.

Analysts at Bloomberg Intelligence have their estimate for TikTok’s US operations pegged in the $30 billion to $35 billion range. That’s the estimate they released in July, saying at the time that the value of the unit would be “discounted due to it being a forced sale.”

Bloomberg Intelligence analysts noted that finding a buyer for TikTok’s U.S. operations that can both afford the transaction and handle the accompanying data protection regulatory probe makes a sale challenging. It could also make it difficult for a buyer to expand TikTok’s ad business, they wrote.

A consortium of business people, including billionaire Frank McCourt and O’Leary Ventures chairman Kevin O’Leary, made a bid to buy TikTok from ByteDance. O’Leary has previously said the group would be willing to pay up to 20 billion dollars to acquire the US assets without the algorithm.

Unlike a Musk bid, O’Leary’s group’s bid would be free of regulatory scrutiny, O’Leary said on Monday interview with Fox News.

O’Leary said he is “a huge Elon Musk fan” but added “the idea that the regulator, even under the Trump administration, would allow this is pretty slim.”

TikTok, X and O’Leary Ventures did not respond to requests for comment.

Clock: Chinese TikTok alternative increases