/TikTok’s Parent Said to Weigh Selling a Majority Stake in the Video App

TikTok’s Parent Said to Weigh Selling a Majority Stake in the Video App

ByteDance, the father or mother firm of TikTok, is weighing its possession choices for the widespread video app after the Trump administration threatened to ban the app from the United States this month, in accordance to individuals briefed on the discussions.

One path that ByteDance, a privately held firm in China, is discussing with its greatest backers is a potential deal that might primarily carve out the app, stated the individuals, who weren’t approved to converse publicly. Under that plan, TikTok would obtain new investments from present ByteDance traders — together with the funding corporations Sequoia and General Atlantic — with the Chinese firm retaining a minority holding, these individuals stated.

ByteDance has raised billions in funding and is valued at $100 billion, in accordance to the analysis agency PitchBook. Its different traders embrace Tiger Global Management, KKR, NEA, SoftBank’s Vision Fund, GGV Capital and Hony Capital.

The talks, which had been reported earlier by The Information, are at a preliminary stage, these individuals cautioned, and no possibility has been determined.

A spokesman for TikTok declined to touch upon the particulars of any deal discussions. In current weeks, “there have been numerous suggestions made by external people not involved in the company’s internal discussions,” the spokesman stated.

It is unclear whether or not the Trump administration would contemplate such a plan sufficient to defuse what it views as the nationwide safety dangers of ByteDance’s possession.

For now, ByteDance faces strain on a number of fronts in the United States, caught in an intensifying cold war as Mr. Trump blames Beijing for the spread of the coronavirus, for fights over control of the South China Sea and for reciprocal bans of journalists in each country.

ByteDance now stands alongside Huawei, the telecommunications giant, as a major target of the Trump administration’s campaign against Chinese tech companies on national security grounds.

Last year, the federal panel that reviews transactions for national security began examining ByteDance’s 2017 acquisition of Musical.ly, the American app that became TikTok. Senator Marco Rubio, Republican of Florida, and other lawmakers had expressed concerns over potential censorship within the app, as well as any sharing of TikTok user data with the Chinese government.

The panel could ultimately order ByteDance to divest Musical.ly’s American assets, or at least change how it transfers and stores data around the world.

In February, Senator Josh Hawley, Republican of Missouri, criticized what he called a “pattern of secrecy” around ties between China and TikTok and Apple. This month, Secretary of State Mike Pompeo said the administration was considering banning Chinese social media apps on national security grounds.

In response, TikTok announced that it would evaluate changes to its corporate structure.

Criticism of TikTok’s Chinese ownership is a bipartisan issue: A defense spending bill approved by the Democratic-controlled House this week includes a provision that would ban use of the video app on government devices.

This month, Amazon told its employees to delete TikTok from their phones, citing security concerns, but backtracked hours later. Other companies, including Wells Fargo, went through with the bans. Branches of the U.S. military have barred personnel from using the app.

The United States is not the only country to express reservations about TikTok. India banned the app and dozens of other Chinese services last month over national security concerns.

ByteDance has rejected claims that it is a national security risk, saying TikTok is run separately from its Chinese operations and pointing out that the app is unavailable in China. In recent weeks, the app has enlisted a bevy of lobbyists to press its case in the halls of Congress, though its executives have declined to testify before lawmakers.

ByteDance also hired Kevin Mayer, a respected American senior executive at the Walt Disney Company, as TikTok’s chief executive this year. Peter Navarro, a senior White House trade official, has since called Mr. Mayer an “American puppet” for ByteDance.

Source link Nytimes.com

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