Trump’s $14B TikTok estimate draws heat for undervaluing what is believed to be worth $40B
The post Trump’s $14B TikTok estimate draws heat for undervaluing what is believed to be worth $40B appeared on BitcoinEthereumNews.com.
Donald Trump’s $14 billion estimate for TikTok’s U.S. business is catching fire across financial and political circles, with critics slamming it as a ridiculous undervaluation for one of the biggest social platforms in the country. The figure was thrown out Thursday by Vice President JD Vance as Trump continues pushing a plan for American investors to take over the U.S. arm of the app from Chinese parent ByteDance, as Cryptopolitan reported. The number is way below earlier valuations, which had TikTok priced closer to $40 billion. The expected buyers (Oracle and Silver Lake Management) aren’t likely to argue with the lowball offer. ByteDance and its current investors, though, are seeing red. Vance made it clear the final price will be up to the buyers, but the public estimate already set the tone. Ashwin Binwani, founder of Alpha Binwani Capital, said the suggested deal “could be the most undervalued tech acquisition of the decade.” He argued the number doesn’t come close to matching TikTok’s real value. “By every major financial metric and peer comparison,” Ashwin said, “this price tag looks dramatically misaligned with reality.” Analysts compare TikTok valuation to oil and cereal TikTok pulls in over $10 billion a year just from the U.S. market. That part of the business alone has 170 million active users, the app’s largest audience worldwide. And yet the $14 billion price implies a price-to-sales ratio of 1.4 times, a number you’d expect from legacy corporations like ExxonMobil or General Mills, not a social media company dominating the short-form video space. Meta, which owns Instagram, trades at 10x revenue. Alphabet, which owns YouTube, is around 8x. Despite how difficult it’s always been to value TikTok, partly because no one outside the company fully understands its recommendation algorithm, most analysts still agree that it’s worth way more.…
