White House takes unprecedented role in TikTok sale

The White House is acting as an investment banker in the TikTok sale, with Vice President JD Vance running the auction, an unprecedented level of intervention by the highest office in a private deal.

A rarity in history

Mr. Vance’s chief lawyer, Sean Cooksey, a former chairman of the Federal Election Commission, was the primary contact for bidders for TikTok’s U.S. assets. Cooksey provided feedback and suggested adjustments to the bids, according to Reid Rasner, a Wyoming businessman involved in the auction.

According to President Donald Trump, there are four investors bidding to buy TikTok's assets in the US.

US President Donald Trump recently said that four different groups are competing to buy the popular short video app, which has 170 million users in the US and faces the risk of being shut down next month if its Chinese parent company ByteDance cannot find an American buyer. "A lot of people want to own it and the final decision is mine," Mr. Trump said on March 9.

While it is not unusual for Washington to intervene in private transactions of publicly traded companies for strategic reasons, direct White House oversight of the auction process is rare, said Richard Briffault, a lawyer specializing in government ethics and a lecturer at Columbia Law School. "I've never really seen anything like this. This is the highest level of government and it's not clear whether this company is really strategically important," said Briffault.

ByteDance's US investors include Jeff Yass's Susquehanna International Group, General Atlantic, Kohlberg Kravis Roberts (KKR) and Sequoia Capital. The deal has also attracted interest from other billionaires and entrepreneurs.

Olympique de Marseille co-owner Frank McCourt, founder of Project Liberty, is teaming up with Canadian investor Kevin O'Leary and Reddit co-founder Alexis Ohanian to make a bid. A source close to the matter said social media star Jimmy Donaldson is also in talks to join the group. Mr Trump has suggested the US could take a 50% stake in TikTok's US operations.

According to Mr. McCourt, the auction process was not conducted in a conventional way. There was no specific list of assets, no clear valuation, and ByteDance did not hire an investment bank to lead the deal. Mr. McCourt said that Beijing has a say in the sale of TikTok, and ByteDance could choose to shut down the app in the US. The Chinese parent company was only superficially involved in the negotiations, not the attitude of an active seller.

Negotiations are still underway, according to several potential investors, who have until April 5 to reach a deal. Officials said Mr. Vance expects to have the broad terms of a deal by that date.

Previous interventions by the US government

US officials have intervened in the operations of private companies before, but mainly to prevent abusive monopolies, ensure foreign investors do not control US companies, or prevent financial firms from failing.

TikTok CEO Shou Zi Chew (center) at President Donald Trump's inauguration.

The U.S. Treasury regularly reviews foreign investments in U.S. companies that own or control sensitive technology, data, or infrastructure, such as Japan's Nippon Steel's $14.9 billion purchase of U.S. Steel. During the 2008 financial crisis, the Federal Reserve brokered several deals, including JPMorgan's purchase of the failing brokerage Bear Stearns.

The White House’s motives for selling TikTok, however, remain unclear. Congress banned the app under the Joe Biden administration after it was deemed a national security threat, requiring ByteDance to sell its US assets to an American buyer. Mr. Trump signed an executive order extending the January 19 deadline by 75 days, though he also said he could extend it further.

“The difference here is that this company does not appear to have significant strategic significance in the US, nor would its departure or failure to sell it cause significant financial or strategic damage to the economy or the country,” explained lawyer Briffault.

President Trump has not shied away from defending his favorite companies, warning that vandalism of Tesla dealerships would be considered domestic terrorism. He has credited TikTok, which he restricted in his first term, with helping him win over young voters in the 2024 election.

The sale price of TikTok, which has varied widely in valuation, would depend on whether its signature algorithm is included. Some equity analysts estimate TikTok could be worth between $50 billion and $100 billion if it includes the algorithm, which collects user data and is considered the backbone of the business. ByteDance recently told employees that its latest share buyback program valued the entire company at more than $315 billion. Trump himself has said the company could be worth as much as $1 trillion.

Without the algorithm, TikTok would only sell for $40 billion to $50 billion, Wedbush analyst Dan Ives estimates.

Entrepreneur Reid Rasner, who has made a $47.45 billion offer for TikTok’s U.S. operations and algorithm, said his lawyers have been in contact with ByteDance’s Washington lobbyists, the company’s legal counsel and the White House. “We want to do whatever it takes to get this done. We’re willing to do anything,” Rasner said, declining to identify the investors behind it.

(Source: Reuters)

Source: https://www.baogiaothong.vn/nha-trang-dam-nhan-vai-tro-chua-tung-co-tien-le-trong-vu-ban-tiktok-192250318125855421.htm