TikTok, is an app which every single teenagers knows about it. There wouldn’t be a single person who doesn’t know about TikTok app. That’s how much popular the app is right now. Especially during the global pandemic COVID-19, many people have started to use TikTok app. The TikTok app is owned by Chinese company called ByteDance.
Due to its originality from China, the US government is thinking of banning the world’s most popular app. At the same time, TikTok has also officially banned in India a few weeks ago. Both these countries had to consider the same action because these countries government believes that TikTok is storing its user’s personal information in a server in Beijing, China. Nevertheless, this did not stop TikTok from booming the app market.
Now, the only solution we can think of is to sell TikTok to American investors. Well, it seems like that could be the possible chance now. This is because TikTok can only enter back into India and the United States without any issues once it is moved away from China. According to Reuters, ByteDance is discussing the valuation of TikTok. This could be one of the steps before it sells TikTok to American investors.
Crazy valuation for TikTok $$$
Well, when we take a look at the valuation we were stunned actually. As per the discussion by ByteDance, it is setting the valuation of TikTok at a whopping USD 50 Billion (RM 211 Billion). So if any of the investors are planning to buy TikTok, they might need to pay USD 50 Billion in order to complete the deal.
We are sure some of you might be thinking why TikTok app is being valued at USD 50 Billion. To answer the question, the China company predicted that TikTok could be earning revenue of USD 1 Billion in 2020. So taking this amount into consideration, it multiplies with the factor of 50. That is how you get the USD 50 Billion valuations. In comparison with other apps, TikTok is growing drastically. Even now, business people can start to advertise on TikTok using the TikTok for Business.
The Reuters also reported that TikTok is expecting its revenue to reach up to USD 6 Billion in 2021. So the company feels that it is the right time to increase its valuation to USD 50 Billion. Apart from TikTok, Huawei is also owned by China. That is the reason the United States government banned Huawei from doing business in the US. Since Huawei doesn’t really rely on the parts from the US, it still can survive being in the hands of China. But for TikTok, that’s not the case. Especially for countries like India, millions of users are using TikTok daily. Some say that TikTok is being misused too by some users.
From the report, we understand that Sequoia and General Atlantic (GA) will have the majority ownership of TikTok. These two investor companies are based in the United States of America. So if the deal is being finalized then TikTok will be a complete American owned app. According to ByteDance, there are other investor companies too who are willing to purchase TikTok with the USD 50 Billion valuation. But as for now, no official decision taken by the Chinese company. Another option the China company is considering is to sell the U.S operation of TikTok to the Americans.
In conclusion, this is one of the biggest deal in the tech industry. We are really looking forward to seeing whether the deal really takes place or not. Do you think the American investors are ready to purchase the 15-second video app for a whopping USD 50 Billion? Let us know in the comment section below.
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