ByteDance may spin off TikTok to ensure that the popular video app is not banned in the U.S.
The potential
spinoff would be done via a sale or an initial public offering to
increase transparency around TikTok's ownership structure. Such a move
is considered a last resort and would need to be approved by the Chinese
government, sources familiar with the discussions told Bloomberg.
- ByteDance
is unlikely to discuss this plan publically until the U.S. Committee on
Foreign Investment concludes its national security review process on TikTok.
- To
appease concerns that the Chinese government could access TikTok user
data, the company is implementing changes under the so-called Project Texas.
- These
changes include hiring tech giant Oracle to host U.S. user data and
appointing a three-person government-approved oversight board.
- According to a Bloomberg estimate, TikTok's U.S. unit could be worth between $40B and $50B.
- The European Commission recently banned TikTok for all its employees and the Belgian government has made a similar decision.
- In the U.S., the House of Representatives ordered all employees to delete the app from their devices in December.
- Texas, Oklahoma, Utah, Tennessee, Iowa, and North Dakota are some of the states that have banned TikTok on government devices.
