Here’s How Much Billionaires Might Pay For TikTok In The U.S.

Forbes

TikTok is difficult to value. Keeping those complications in mind, Forbes spoke with at least nine people and came up with these different scenarios.  Read the full story on Forbes: https://www.forbes.com/sites/phoebeliu/2025/01/15/how-much-billions-tiktok-really-worth-possible-ban/?utm_medium=social&utm_source=ForbesMainTwitter&utm_campaign=socialflowForbesMainTwitter  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, how much is TikTok really worth?

00:06The Supreme Court could rule on a potential TikTok ban in the U.S. as early as Thursday

00:10morning, after justices indicated last week they were likely to uphold the federal law

00:15in question.

00:16The ban would go into effect this Sunday, January 19th, a day before President Trump's

00:21inauguration.

00:23Unless President Biden extends the deadline or Congress passes a new bill introduced earlier

00:27this week, that would give the social media app's Chinese parent company ByteDance another

00:32270 days to divest.

00:35Or ByteDance sells the U.S. version of the platform to American owners.

00:40The big question, how much would TikTok cost?

00:43TikTok is especially hard to value.

00:46There's not only the question of the prized algorithm, but also the fact that it's currently

00:50a division of a private company based in China.

00:53And to complicate things even more, TikTok is technically a subsidiary of shell companies

00:58registered in the financially opaque Cayman Islands, which makes it nearly impossible

01:02for outsiders to know exactly how much revenue, let alone profit, TikTok makes in the U.S.

01:09A forced sale during a temporary ban would likely influence what someone might pay for

01:13TikTok as well.

01:16Counsel for TikTok and ByteDance wrote in court documents that a one-month shutdown

01:20could result in a 29% drop in TikTok's global ad revenue for the year.

01:26There are also potential costs associated with a sale.

01:29DA Davidson analyst Gil Luria says, quote,

01:33TikTok would need to create a lot of new infrastructure that it would lose from its parent company

01:37in a potential spinoff.

01:40Keeping those complications in mind, here are four potential ways to value TikTok.

01:45Number one, Frank McCourt's $20 billion offer.

01:50An investor group led by Frank McCourt, the real estate billionaire who used to own the

01:54L.A. Dodgers and his nonprofit Project Liberty, thinks that it will be able to buy TikTok

01:58in the U.S. without its algorithm for $20 billion.

02:02ByteDance, which has repeatedly said that TikTok is not for sale, hasn't publicly acknowledged

02:07the offer.

02:08$20 billion is approximately equal to the enterprise value of competitor Snapchat.

02:14Benchmark analyst Mark Zagutowicz says one way to get to that number is if they'd valued

02:19TikTok based on a multiple of the number of users.

02:23$20 billion equates to about $120 per each of TikTok's 170 million American users.

02:30That's between the comparable ratios of Snapchat and Meta.

02:35Number two, market's multiple magic.

02:38A common way to value a consumer tech company, like TikTok, is as a multiple of revenue.

02:44TikTok generates revenue from advertising, live streaming videos, and e-commerce.

02:49In Singapore, where good data is available, the latter two categories made up 83% of 2023

02:56revenue.

02:57While TikTok published 2023 revenue of roughly $13 billion for its two other main subsidiaries

03:02registered outside of China, it does not disclose its sales for the U.S.

03:07Let's say that U.S. revenue in 2023 was $16 billion, as reported by the Financial Times,

03:13citing anonymous sources, and that ByteDance's revenue outside of China grew at least 40%

03:19in the first half of 2024, as reported by the Information, citing knowledgeable sources.

03:25That gives us a rough guess of $22 billion in U.S. sales in 2024.

03:31Analysts Gutwitz and Luria then both recommended an enterprise value-to-revenue multiple of

03:36six times, which is somewhere in between that of Snap, 3.5x, and Meta, 8x.

03:43Applying that to the $22 billion revenue estimates would yield a rough value of $132 billion.

03:50That's including TikTok's algorithm.

03:533. The $300 Billion Golden Algorithm

03:58ByteDance's machine-learning-powered algorithm is uniquely good at capturing user behavior

04:03and captivating users by recommending personalized content, such as which new videos to watch.

04:09Though ByteDance is unlikely to sell it, and there's no real precedent for valuing an algorithm

04:13separately from an operating company, some analysts have thought about it.

04:18For Wedbush analyst Dan Ives, the algorithm is gold.

04:21He thinks TikTok would be worth $300 billion with it, emphasizing the advertising revenue

04:27potential from, quote, 200 million potential highly-engaged U.S. customers.

04:334. Just the Bare Bones

04:36Benchmark's Zagutowitz actually thinks TikTok's U.S. revenues are lower than what the Financial

04:41Times reported, closer to $13 billion, and guesses it is worth around $55 billion without

04:48the algorithm.

04:49Wedbush's Ives also thinks it's worth just $40 billion to $50 billion without the algorithm.

04:56For full coverage, check out Phoebe Liu and Matt Duro's piece on Forbes.com.

05:03This is Kieran Meadows from Forbes.

05:05Thanks for tuning in.

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