ByteDance, the owner of TikTok, may opt to close down its unprofitable app instead of selling it if the company runs out of legal avenues to challenge legislation aiming to remove the platform from U.S. app stores, according to four insider sources. TikTok’s CEO Shou Zi Chew expressed confidence on Wednesday that the company would prevail in legal challenges against legislation signed into law by President Joe Biden, which aims to ban the popular short video app used by 170 million Americans. The legislation, overwhelmingly passed by the U.S. Senate on Tuesday, reflects widespread concerns among U.S.
ByteDance does not publicly disclose its financial performance or the financial specifics of its units.Two of the four sources disclosed that ByteDance’s revenues in 2023 surged to nearly $120 billion from $80 billion in 2022.
Furthermore, the sources added that the process of separating the algorithms from TikTok’s U.S. assets would be exceedingly complex, making it an unlikely option for ByteDance to consider. The sources also emphasized that ByteDance would not entertain selling one of its most valuable assets — its “secret source,” referring to the TikTok algorithm — to competitors. In 2020, the Trump administration attempted to ban TikTok and Chinese-owned WeChat, but was blocked by the courts.
However, ByteDance may struggle to attract buyers for TikTok’s U.S. assets excluding algorithms, the sources cautioned. ByteDance, backed by investors including Sequoia Capital, Susquehanna International Group, KKR & Co, and General Atlantic, was valued at $268 billion in December, when it proposed to repurchase approximately $5 billion worth of shares from investors, Reuters reported at the time.
