CGTN Europe spoke to Dan Ives, Managing Director and Senior Tech Analyst covering the Technology sector at Wedbush Securities
Category
🎵
MusicTranscript
00:00 Let's go back now to the news that a ban on TikTok could be just months away after US President Joe Biden signed a bill on it into law.
00:08 And we can talk to Dan Ives, who's Managing Director and Senior Tech Analyst at Wedbush Securities.
00:12 Good to see you again, Dan. Welcome back to the program.
00:14 So we've had TikTok CEO immediately coming back on this bill being signed into law, saying the app's going nowhere.
00:22 So are we really going to see it get banned?
00:25 Look, I mean, this is a game of high stakes poker, but when Biden signs it, it goes into law.
00:31 And we view this as a year where the clock started.
00:35 They'll clearly challenge us in court, but I believe this is going to get to a point where clock strikes midnight and they're likely going to have to sell TikTok without the algorithm.
00:46 So one of the options is by selling TikTok, TikTok rather, as who might buy it and why might they buy it?
00:54 Yeah, well, this is one of the most unique assets in the world.
00:59 Without the algorithm, we think it's probably worth 30 to 40 billion.
01:03 I view Oracle, Microsoft, potentially Amazon as the top potential bidders here.
01:10 Look, they're going to fight this tooth and nail in terms of the legally through the courts.
01:15 But a year from today, it's going to get to a point where they do not sell it the way things stand.
01:23 This could get banned.
01:25 So you said that they might sell it without the algorithm.
01:28 Explain to us what that actually means and whether it would be worth anything without it.
01:33 Yeah, with the algorithm is another story.
01:36 Wouldn't that's worth 100 billion.
01:38 But we see no way that the Chinese or Biden's would sell it with the algorithm.
01:44 Now, without the algorithm is different because you call it a victory for China.
01:49 They keep the algorithm.
01:51 Then ultimately, whoever bought it, whether it was a tech player, private equity would essentially have to almost build their own algorithm.
01:58 That's going to be the issue here.
02:00 I mean, this is almost like a Siamese twin operation in terms of the complexity of trying to sell this asset.
02:07 What along without the algorithm?
02:09 So we've seen TikTok being the focus of this bill.
02:12 Why do you think this company, rather than other social media apps, Facebook, Instagram, for example, which also store user data?
02:21 Look, it's the China piece, right?
02:23 And this has been the debate for years.
02:25 And then go back to Trump administration.
02:28 And when you look at Project Texas, which is the Oracle partnership, remember, that's that's another piece where Oracle is very, very strong partnership in terms of TikTok and the data.
02:41 But it's part of the shot across the bow.
02:44 And I think now that the clock starts, we're going to see I think it's a get out the popcorn.
02:50 We're going to see a lot of, I think, turns and twists in this TikTok saga.
02:57 So as you say, the clock has now started ticking roughly nine months until a resolution has to be found.
03:03 Do you think there will be a sale or some other resolution in that time or will it just keep rumbling on?
03:09 I think it will go through on the legal side.
03:12 But I believe at this point, the chances of a sale are more than 50 percent because they wouldn't face a ban if they actually had a ban.
03:20 The value would significantly decrease. But this is getting real.
03:24 This is no longer just talk. This is a bill that signed changes the whole calculus.
03:29 Now, TikTok is going to fight in court.
03:32 Dan, good to talk to you. Thank you for joining us today. Dan Ives from Webush Security.