The proposed valuation for TikTok's U.S. business transaction is only $14 billion, with Oracle, Silver Lake, and MGX potentially holding 45% and obtaining board seats
Oracle, Silver Lake Partners, and MGX are in talks to invest in the U.S. version of TikTok, with a deal valuation of approximately $14 billion, expecting to hold 15% each and gain board seats. Trump has approved the proposal, requiring ByteDance to reduce its stake to below 20% to comply with U.S. law. This valuation is significantly lower than analysts' expectations and could be the lowest tech acquisition valuation in a decade
According to the Zhitong Finance APP, U.S. President Trump has approved a proposal allowing TikTok to continue operating in the U.S. Vice President Pence stated that this deal will value TikTok's U.S. business at approximately $14 billion. According to the proposal, TikTok's U.S. business will be controlled by an American investment group, with Oracle (ORCL.US) serving as TikTok's security service provider.
The specific members of the investment group have not yet been finalized. Trump's executive order stipulates that the transaction must be completed within 120 days, and it remains unclear whether the Chinese side will approve the plan.
According to informed sources, Oracle, Silver Lake Capital, and UAE's MGX are in talks to invest in TikTok's U.S. business and secure board seats. One source indicated that the Trump administration has recently encouraged MGX to join a non-Chinese-controlled alliance. ByteDance's stake in TikTok U.S. will be less than 20%.
Pence stated, "The final investment amount and valuation will be determined by the investors," and pointed out that "there is some resistance from the Chinese side."
The $14 billion valuation is significantly lower than some analysts' expectations. In April of this year, Wedbush Securities analyst Dan Ives estimated TikTok's value, including its algorithms, at around $100 billion, and $30-40 billion excluding algorithms.
Ashwin Binwani, founder of Alpha Binwani Capital, stated that this "could be the lowest valuation for a tech acquisition in a decade," believing that the actual valuation is underestimated by about two-thirds, and noted that "all core financial metrics compared to peers show that this pricing is severely disconnected from reality."
It is reported that the three parties plan to each hold about 15% of the shares and each secure a board seat, but the shareholding ratios may be adjusted. This negotiation stems from Trump's demand for ByteDance to sell TikTok's U.S. business to American investors. According to the emerging agreement, ByteDance's stake will be reduced to below 20% to comply with U.S. legislation requirements for 2024, or it will face a nationwide ban.
MGX, as an investment vehicle newly established by Mubadala Investment Company and tech giant G42 in 2024, has invested in star companies such as OpenAI and Databricks, and has set up a team for infrastructure and energy investments.
The organization is led by UAE national security advisor and the president's brother, Sheikh Tahnoon bin Zayed Al Nahyan, managing an industrial empire worth $15 trillion, and is currently planning to raise billions of dollars in third-party funding for the artificial intelligence sector.
In March of this year, MGX invested $2 billion in Binance Holdings through a stablecoin issued by the decentralized finance project World Liberty Financial, associated with the Trump family
