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Come on, everyone, let's buy TikTok!

TikTok logo with price tag and three dollar signs
TikTok; BI
  • The addictive app TikTok may soon be for sale.

  • Famous people are lining up to try to buy it.

  • BI readers: If WE want to try to buy it, too, we can! Here's what we'd have to do...

The House has passed a bill that might force TikTok's owner, the Chinese company ByteDance, to sell the app — or else risk having it banned in America by the US government.

First, let's acknowledge that this is a smart solution to the TikTok problem — namely, that an estimated 170 million Americans are addicted to an app that critics say is capable of gathering sensitive data about each of them and sharing it with an authoritarian and potentially hostile foreign government and/or brainwashing them with mind-warping propaganda that might be helpful to that government.

Unless you really hate America, you will probably agree that this situation is not ideal and that, therefore, the US government should probably do something about it. China sure as heck wouldn't let an American company own an app that could gather data on and brainwash its citizens!

Let's also acknowledge that there's almost no way that the US government will ever ban TikTok, because the 170 million Americans who are addicted to it will vote them out of office if they do.

So there needs to be some other solution.

And transferring the app to a corporate parent that does NOT answer to the Chinese government is probably as good as any.

So, in the wake of the (notably bi-partisan) House bill, some Americans are already volunteering to buy TikTok — such as former Treasury Secretary Steven Mnuchin.

Mr. Mnuchin, a former Goldman Sachs partner, movie producer, and generally smart person, would certainly be a less problematic owner of TikTok than a potentially hostile authoritarian foreign government.

But why should he have all the fun?

Why don't we buy TikTok instead?

Here's how we would do it:

  • We would pick a leader for our buyout group — someone to be our Steven Mnuchin. (If you insist, I'll consider it, but there are probably other people who would be better. For one thing, I'm busy. For another, I am actually not yet addicted to TikTok).

  • We would put together a plan to grow TikTok and ultimately make TikTok worth a lot more than we pay for it.

  • We would put together a management team to run TikTok after we buy it. Again, if there's really no one else we can find to do it, I suppose I can lead this team. But I confess my bucket list does not include "be CEO of TikTok."

  • We would go meet with lots of investors who have lots of money and try to persuade them that our plan for TikTok will make them a lot more money. These investors would include private equity funds, hedge funds, pension funds, sovereign wealth funds, mutual funds, and, of course, banks. Banks because the first rule of leveraged buyouts (which is what this will be) is that you want to borrow as much of other people's money as possible to pay for your purchase so you can risk their money instead of your own. Elon Musk borrowed billions to buy Twitter, for example. And Elon's no dope.

  • We would figure out how much we could pay for TikTok and still end up making a lot of money for ourselves and our investors. (TikTok's US business is worth about $35 billion to $40 billion, according to one estimate).

  • We would go to ByteDance and make our offer — and hope it's the best offer that ByteDance gets (better than Steven Mnuchin's offer, for example).

  • We would wire ByteDance the money and buy TikTok!

That really is all we would have to do. (Assuming, of course, China or regulators don't try to block the sale).

That's what Steven Mnuchin and everyone else who wants to buy TikTok are planning to do. That's why Mnuchin made his announcement on CNBC this morning — to let every investor on the planet who might give him money to buy TikTok know that he's raising money to buy TikTok. He saved himself a lot of emails and phone calls.

(And also, cleverly, reversed the psychology of the sale: Now, any investor who might want in will call Mr. Mnuchin and pitch HIM instead of him having to pitch THEM. ("Wait — he's putting together a group to buy TikTok and he hasn't called us yet? How do we get in on that?")

So, who wants to do it?

Read the original article on Business Insider