The U.S. government’s recent move to facilitate a divestiture of TikTok from its Chinese parent, ByteDance, has sparked significant debate regarding the social media giant’s valuation. President Donald Trump’s executive order on Thursday has paved the way for a U.S. ownership structure, averting a complete shutdown of the popular app in the United States. This development, however, has been overshadowed by a remarkably low valuation estimate for TikTok, causing a stir in financial markets and among industry analysts.
Vance’s $14 Billion Valuation Criticized
Vice President JD Vance’s assessment of TikTok’s worth at $14 billion has drawn sharp criticism, with many deeming it incongruent with the platform’s user base and market position. This figure, which equates TikTok to the valuation of Snapchat’s parent company, Snap, has been described as “crazy” and lacking logical basis by prominent figures in the tech analysis sector. For context, major social media entities like Meta command valuations approaching $2 trillion, underscoring the perceived disparity in Vance’s estimation.
Financial Experts Dispute Valuation
Financial experts have contested Vance’s $14 billion figure, suggesting it significantly undervalues TikTok’s actual market worth. Ashwin Binwani, founder of Alpha Binwani Capital, stated that the Vice President’s assessment represents only a third of the platform’s true value, asserting that it deviates dramatically from established financial metrics and peer comparisons. This sentiment is echoed by Wedbush analyst Dan Ives, who earlier this year projected TikTok’s valuation to be “well north of $100 billion,” potentially reaching $200 billion in an optimistic scenario. Even without its proprietary algorithm, Ives estimated its value between $40 billion and $50 billion.
Proposed U.S. Ownership Structure
The U.S. strategy reportedly involves placing TikTok’s influential algorithm under the stewardship of American investors, with further details expected to emerge. Reports indicate that Oracle is slated to develop a new U.S. version of TikTok’s algorithm and bolster data security measures. The proposed ownership structure, still under finalization, envisions a substantial role for Oracle and its cofounder Larry Ellison, alongside conservative media figure Rupert Murdoch and billionaire Michael Dell on the board. President Trump has also alluded to the inclusion of three additional prominent “blue-chip” investors in the ownership consortium. While President Trump humorously addressed concerns about algorithm bias, he assured equitable treatment, and Vice President Vance emphasized that business considerations would guide content decisions on the platform.
Jonathan Reed received his MA in Journalism from Columbia University and has reported on corporate governance and leadership for major business magazines. His coverage focuses on executive decision-making, startup innovation, and the evolving role of technology in driving business growth.