TikTok’s Fire Sale

Talk about a fire-sale price. That’s the only way to describe the $14 billion valuation we learned today is being put on TikTok U.S. in the Trump administration–orchestrated sale of the app. Given what we’ve reported about TikTok parent ByteDance’s revenues, and our guesstimate about how much came from TikTok, the valuation may be less than one times revenue. For a business growing as quickly as TikTok has been, that’s a rock-bottom price. Meta Platforms, by contrast, is trading at 10.5 times last year’s revenue, according to S&P Global Market Intelligence.

Look at it another way. ByteDance is currently valued at about $337 billion in the secondary market for private tech stocks, according to Caplight. While TikTok is likely less than a quarter of ByteDance’s revenue—and may be losing money—it has been one of the most important growth engines for the Chinese tech giant. TikTok U.S. is in turn likely the most important part of the app in advertising terms. You can imagine some investors putting a valuation on TikTok U.S. of as much as $100 billion. But of course, this was a forced sale. Without it, TikTok would have had to shutter in the U.S. ByteDance likely feels that by holding only 19.9%—part of the deal—it will retain some value in the longer term.