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Wednesday, May 22, 2024

Billionaire Frank McCourt Launches Bid to Acquire TikTok

Since Congress passed a bill that would force the Chinese company ByteDance to sell or shut down TikTok, a pressing question has emerged: Who could purchase it, considering the technological, political, and financial hurdles involved?

Billionaire Frank McCourt has expressed interest. On Wednesday, McCourt announced that he is working to assemble a group of bidders to buy the social media app. His objective is to rethink how TikTok and the internet use data and handle privacy. He has initiated discussions about the app with academics and experts on technology’s impact, including Jonathan Haidt, whose book “The Anxious Generation” examines how smartphones have affected adolescents’ mental health.

McCourt, who previously owned the Los Angeles Dodgers and made his fortune in real estate, has long been fascinated by the interplay of technology and society. In 2021, he launched Project Liberty, an initiative focused on remaking the internet and reclaiming user data from tech giants like Facebook and TikTok.

The fate of TikTok hinges on whether ByteDance can find a buyer. Without one, the app may be forced to cease operations in the United States. However, acquiring TikTok would be extraordinarily expensive, reducing the number of potential buyers. Most large tech companies would likely face antitrust scrutiny if they attempted to purchase the app.

Despite these challenges, interest in TikTok remains high. In March, former Treasury Secretary Steven Mnuchin made headlines by stating he was “trying to put together a group to buy TikTok, because they should be owned by U.S. businesses.” TikTok’s U.S. investors include Susquehanna Investment Group and General Atlantic.

McCourt’s bid is in its early stages. He has not disclosed all the individuals he has discussed the purchase with or explained where he might source capital for the offer.

Several questions about a potential TikTok sale remain unanswered. The Chinese government has the power to block the sale of TikTok’s valuable algorithm, and separating TikTok’s U.S. operations from ByteDance’s might be challenging. Given this uncertainty, McCourt has not yet discussed a potential valuation. However, he expressed interest in TikTok even without its video recommendation technology and has already enlisted financial advisors from Guggenheim Securities and legal advisors from Kirkland & Ellis.

McCourt emphasized that there is value in TikTok’s extensive user base, its content, its brand, and “a lot of technology short of the algorithm.”

In April, President Biden signed the new law mandating TikTok’s sale, following a swift legislative process that concluded a nearly yearlong debate. Lawmakers and intelligence officials have grown increasingly concerned that TikTok poses a national security threat.

As McCourt works to gather a group of bidders, he is positioning his vision of a reimagined internet where users have more control over their data. The coming months will reveal whether his efforts, combined with the legal battles and political pressures, will result in a new ownership structure for TikTok. If successful, McCourt’s acquisition could mark a significant shift in how social media platforms operate and manage user data, potentially setting a precedent for other tech companies.

David Faber
David Faber
I am a Business Journalist of The National Era
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