Twitter Inc. has contacted TikTok ‘s Chinese parent, ByteDance. To demonstrate its interest in purchasing U.S. video-sharing app’s operations, two people familiar with the matter told Reuters, as analysts expressed concerns over Twitter’s willingness to attract funds for a possible purchase.
It’s doubtful that Twitter will be able to incorporate enough resources to deal with Microsoft’s bid for the service.
News of Twitter and TikTok being in the lead-up and Microsoft still being seen as the frontrunner in bidding for the U.S. app’s operations has been reported earlier by the Wall Street Journal.
Twitter has a market capitalization of about $30 billion. As high as the value of TikTok’s funds. So, according to the reports, it will have to collect extra capital to finance the transaction.
“Twitter will have a hard time scraping together enough money to buy TikTok ‘s U.S. operations.” said Erik Gordon.
“If it (Twitter) is seeking to set up an investor party, the conditions would be difficult. Twitter’s own owners may want the management to concentrate on their current company, “he said.
One of Twitter’s shareholders, Silver Lake, shows interest in helping fund a potential deal.
Twitter also privately argued that its bid would face less regulatory scrutiny than Microsoft’s, and would not face any competition from China because it is not involved in that region, sources said.
TikTok, ByteDance, and Twitter declined to comment.
TikTok has come under pressure from U.S. senators over national security issues related to data processing.
Earlier this week, Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and TikTok. This escalated tensions between the two countries.
Trump said this week he would support Microsoft’s efforts to buy TikTok’s U.S. operations if the U.S. government got a “substantial portion” of the proceeds. He nevertheless said he will ban the popular app on Sept. 15.
Trump said this week that he would support Microsoft’s efforts to purchase TikTok ‘s U.S. operations if the U.S. government had a “substantial portion” of the proceeds. However, he said he would block the famous app on Sept. 15.
Microsoft said it was aiming to conclude negotiations for an agreement by mid-September on Sunday.