TikTok has been ordered by parent company ByteDance to get ready in case it needs to end its US operations. In the event that there is no American buyer, the consequences for the app could be major.
TikTok must disappear from US application stores if there is no acquirer by September 12. That is the harsh policy the Trump administration is pursuing fear that data from US TikTok users will fall into the wrong Chinese hands. Several acquirers have already expressed interest, but the deal is not yet complete. ByteDance, TikTok’s Chinese parent company, has now commissioned the popular video app to prepare for a shutdown in the US. Reuters
For the sake of clarity, this is a plan B for TikTok, because, in the first instance, TikTok is still looking for a buyer in order to continue its activities in the US. As a result of the American blockade, TikTok could also disappear from application stores in us and in other countries, and that would have far-reaching consequences. Several companies, including Oracle, Microsoft, and Alphabet have already publicly expressed their interest.
Prepare for the worst
TikTok will now prepare in case the acquisition does not happen, and the company has already stopped new hires in the US. It recruited only 5 percent of the total number of new hires it originally wanted to employ in the US.
ByteDance declined to comment on the preparations that TikTok is now making, but a spokesperson for TikTok only stated that the social media app expects it will be able to continue its operations in the United States. While TikTok is looking for an acquirer, it also opposes the ban in the US and has previously filed a lawsuit against the country.
There are also a few factors that make it difficult to close a deal. First, there is a high value of $25-30 billion that is estimated for TikTok, because not every company can afford such a takeover. More importantly, there is the cumbersome procedure of the takeover, because the deal must be approved from both China and the US.