TwiTok? Twitter Enters Talks To Acquire TikTok

78shares

Twitter has reportedly entered talks to acquire TikTok’s US operations, after President Trump gave TikTok a 45-day ultimatum, to sell or be banned.

Last week, President Trump stepped up his threats and announced a possible ban on TikTok (and WeChat) in 45 days, giving a potential US buyer enough time to close a deal. Microsoft confirmed interest, Apple denied its own interest, but now Twitter could be a new possible candidate to purchase TikTok’s US operations.

The Wall Street Journal reports that Twitter has held preliminary talks for a possible combination with TikTok. However, with a market capitalization of $29 billion, Twitter is worth almost the same as the assets TikTok was ordered to divest.

This means Twitter would need to raise additional capital in order to pursue a deal.

“Twitter will have a hard time putting together enough financing to acquire even the U.S. operations of TikTok. It doesn’t have enough borrowing capacity,” said University of Michigan professor Erik Gordon.

#TwiTok could have been interesting. But it looks like TikTok may soon operate in the US as part of Microsoft.

Click To Tweet

TikTok is facing an ultimatum to sell its US operations by September 15. A timeline like this makes it almost impossible for Twitter to be a serious contender. On the other hand, Microsoft, with its $1.6 trillion market cap, has confirmed interest, saying that it will “move quickly” in its talks with ByteDance to acquire TikTok’s US operations.

“TwiTok” sounds interesting, but I doubt it could happen (although DT would love that). Our take is that TikTok will soon operate in the US as part of Microsoft.