Tikflix is never going to happen with Netflix reportedly declining TikTok’s signaling that it is interested in talking further about an acquisition.
TikTok is reported to have reached out to Netflix to see whether the entertainment streaming service was interested in purchasing its U.S. operations, although Netflix is said to have declined. TikTok is under pressure from the Trump administration to sell or to face a ban. Microsoft and Oracle are both reported to be in ongoing talks with ByteDance, TikTok’s parent company, to acquire the application’s U.S. operations.
TikTok has sued the Trump administration to prevent the President from banning the app if it is not sold prior to the deadline. The lawsuit could potentially result in a stay order to allow the company to continue operations as it negotiates with interested buyers while also reaching out to others, such as Netflix, that might be an interested and fitting new American home for the rising social media service.
Business Insider reports that TikTok’s current valuation is estimated to be somewhere between $10 billion and $50 billion dollars. The price is likely to fluctuate depending upon how likely the company appears to be to survive Trump’s political pressure, pressure that might force the company into a vulnerable enough position that a potential buyer could exploit. The pressure is not confined to TikTok alone, as Trump’s administration has called for private and public actors around the world to join forces to create a network free from suspected Chinese surveillance.
Why Did TikTok Reach Out To Netflix?
TikTok is playing a difficult game. Sustaining buyer’s interest is not a challenge, given the value that the service has to offer. However, ensuring a high valuation will be a daunting mission. Microsoft, Oracle, and other interested buyers are making their offers under conditions of uncertainty as well. Will TikTok even be able to operate in the U.S. in three months? The existential dilemma creates an opportunity to offer lower valuations, prior to making an ultimatum offer, prior to the implementation of a ban.
Reaching out to Netflix might have had several causal factors. The more players in the game, the more cautious the players must be as they make their bids. More players also signals competition, as well as the ability of TikTok to reject an offer. If TikTok is backed into a corner with one suitor and a hostile President, it will have little option but to accept a lower offer for the service that it has invested into developing. TikTok might have also felt that Netflix might be a more fitting American home for its service, but the feeling was, unfortunately, not mutual.
More: Trump’s WeChat Ban Softening As Administration Reassures Apple & Others
Source: Business Insider
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