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Peter Cowan · · 5 min readUS TikTok ban looms: What’s next for ByteDance?
The clock seems to be ticking for TikTok in the US.
The House of Representatives overwhelmingly voted in favor of a bill that would force owner ByteDance to sell the US assets of the short-video app or face a ban in the country.
If passed by the senate – where it appears the bill may be held up for some time – and signed into law by President Joe Biden, the Chinese firm would have six months to comply.
Image credit: Timmy Loen
US lawmakers are concerned about the Chinese government’s influence over TikTok and its 170 million users in the US. But what about the impact of this potential ban on ByteDance?
“This process was secret, and the bill was jammed through for one reason: it’s a ban. We are hopeful that the Senate will consider the facts, listen to their constituents, and realize the impact on the economy, 7 million small businesses, and the 170 million Americans who use our service,” said a TikTok spokesperson in response to the passage of the bill.
The company has fought the ban tooth and nail, with TikTok even sending a push notification urging its users in the US to call lawmakers and protest ahead of the vote. But could a potential sale have some upside for the company and its long-awaited IPO?
Tech in Asia spoke to investment analysts and US-China experts for their takes on the bill and the future impact on ByteDance. Their replies were edited for clarity and length.
Possible upsides financially
Photo credit: Ka-ming Lim
Ka-ming Lim is the CEO and co-founder of Singapore fintech firm MoneyFitt. He has experience in the investment industry in London, New York, and Singapore as a stockbroker, fund manager, and trader.
On the assumption that the bill passes both the free speech First Amendment champions in the senate and the US federal courts (which blocked Montana’s state ban last December), and that Beijing, which vehemently opposes a forced sale, doesn’t stand in the way, there could be a positive spin for ByteDance and its shareholders.
It would be fairly simple for ByteDance to distribute TikTok shares in specie to existing ByteDance shareholders, of which 60% are what the company terms “global institutional investors” anyway, and then issue new shares to the public in an IPO in the US. This could assuage any concerns of Chinese ownership.
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ByteDance has fought hard against a TikTok ban in the US, but selling the unit off could be a plus for the Chinese firm’s listing ambitions.
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