Kevin O’Leary, the venture capitalist known for his ruthless critiques and deal-making prowess on “Shark Tank,” has set his sights on a much bigger catch: TikTok. Facing a potential US ban, the Chinese-owned video app has garnered interest from O’Leary, who proposes a buyout at a significant discount, according to a report by CNBC.
O’Leary’s offer lands between $20 billion and $30 billion, a fraction of TikTok’s estimated $220 billion valuation.This steep reduction hinges on the platform losing a critical component – the user-tailored algorithm that curates content for each user and has become synonymous with the TikTok experience. O’Leary acknowledges the challenge of replicating this secret sauce without Chinese involvement. “It’s the largest entertainment and business network in America as it stands today, so it’s of great interest and great value,” he said in an interview with CNBC. However, the algorithm isn’t something which will be a part of the deal. “So what you’re getting is the valuable domestic brand TikTok and 170 million users, with no data,” O’Leary said.
Building a new algorithm from scratch could be a time-consuming and expensive endeavour, potentially impacting user engagement in the short term. Even if a comparable algorithm is developed, it’s uncertain whether users would find it as addictive and effective as the current one, a key factor in TikTok’s explosive growth. “This is the most complex deal ever in social media, and I have to build a new algorithm,” O’Leary said. “It’s a very interesting deal, and I like it,” he added.
O’Leary sees a 50% chance that TikTok will be banned or forced to sell its US operations after the upcoming presidential election. He is reportedly preparing a bid for the company, and has spoken withDonald Trump and plans to speak to US president Joe Biden about the possibility. O’Leary says any deal would require White House approval due to national security concerns. He is also seeking partners for the buyout, and plans to approach sovereign wealth funds starting in April.
O’Leary’s offer lands between $20 billion and $30 billion, a fraction of TikTok’s estimated $220 billion valuation.This steep reduction hinges on the platform losing a critical component – the user-tailored algorithm that curates content for each user and has become synonymous with the TikTok experience. O’Leary acknowledges the challenge of replicating this secret sauce without Chinese involvement. “It’s the largest entertainment and business network in America as it stands today, so it’s of great interest and great value,” he said in an interview with CNBC. However, the algorithm isn’t something which will be a part of the deal. “So what you’re getting is the valuable domestic brand TikTok and 170 million users, with no data,” O’Leary said.
Building a new algorithm from scratch could be a time-consuming and expensive endeavour, potentially impacting user engagement in the short term. Even if a comparable algorithm is developed, it’s uncertain whether users would find it as addictive and effective as the current one, a key factor in TikTok’s explosive growth. “This is the most complex deal ever in social media, and I have to build a new algorithm,” O’Leary said. “It’s a very interesting deal, and I like it,” he added.
O’Leary sees a 50% chance that TikTok will be banned or forced to sell its US operations after the upcoming presidential election. He is reportedly preparing a bid for the company, and has spoken withDonald Trump and plans to speak to US president Joe Biden about the possibility. O’Leary says any deal would require White House approval due to national security concerns. He is also seeking partners for the buyout, and plans to approach sovereign wealth funds starting in April.
Source Agencies
