TwiTok? Twitter Enters Talks To Acquire TikTok

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.

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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.