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Trump says U.S. should get of cut of TikTok purchase

The On the Move panel breaks down the latest with President Trump and Chinese video-sharing app TikTok.

Video Transcript

- Well, we want to get back to that story about TikTok because there are kind of a couple of aspects of this. There is, first of all, President Trump drawing the ire of the Chinese leadership, which-- a representative of which said that basically the, the nation is a rogue country, America is a rogue country. That was according to the editor in chief of the Global Times. So there's that aspect, and then there's the aspect of who might be bidding for TikTok at this time.

Let's start with that portion of it first. Mel or, or Dan, I suspect both of you have some things to say about who should-- who might be the best fit for TikTok. Melody when we get you in here first on this? I mean, it seems like, according to reports, almost ever-- all of the big FAANG stocks might be interested at this point.

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- And really, let's not forget the narrative of the Chinese internet users themselves, right? They are on WeChat calling ByteDance's CEO a traitor as TikTok tries to figure out how to sell the US business. So this is not a win for any sort of segment of this conversation, whether it's the users themselves or potential buyers here.

As you noted earlier in the show, Microsoft is the clear negotiating partner here. Microsoft has openly stated that it is in active talks with TikTok. Of course Google, Facebook, Apple have all been floated over the last couple of days as potential acquirers as well, although Apple, reported by Axios, is the only serious contender perhaps in this play, whereas Facebook and Google in the past, akin to perhaps Snapchat where Yahoo had bid for Snap, Facebook had bid for Snap, Google had a bid for Snap, but Snap ultimately went the IPO route.

So I think we have to take a lot of those reports with a grain of salt because, as TikTok has been explosive, it would almost behoove these internet companies to not look at TikTok as a potential part of its portfolio. So I do feel as though Microsoft, at this point in time, is the real contender, and Apple has denied a lot of these reports.

Let's also keep in mind that Apple's biggest acquisition to date was that $3 billion deal for Beats, and they like to build a lot of things internally. They like buying smaller apps like Dark Sky, but overall their strategy has not buying-- has not been to buy an Instagram type of thing, so that would be a really fascinating development here.

- Yeah guys, I would not rule out any of these players as the possible buyer though, you know, just because Microsoft was the first one fully reported now. As Melody mentioned, Microsoft stands out because it acknowledged, yes, we're in talks. Yes we're interested. Apple, on the other hand, has denied, but I take no stock in that denial. That doesn't at all it make me think, OK, Apple's not interested.

You know, any of these could be next, and, in fact, it always was surprising to me that we would just assume it would be a done deal with Microsoft. I think you're going to see a little bit of a bidding war. Now, that said, I think the interesting discussion here is which company makes sense to buy it? Of those big four, or I guess three of the usual big four plus Microsoft, Facebook would seem the most obvious, and yet look at all the antitrust concerns with Facebook. I mean, here we are hearing lawmakers talk about wanting to make Facebook retroactively sell off-- who, who knows if it'll actually happen-- some past acquisitions, like Instagram and other things and WhatsApp. So maybe too much of a tough time, maybe some heat on Facebook.

But Apple makes less sense. I agree with, with Melody on that, but I also think Microsoft never really made much sense to me to buy TikTok. I mean, I know there's LinkedIn, which people call a social network, but it isn't a social network in the sense of Twitter, Instagram, TikTok, YouTube. And that's why I'd also say Google makes a lot more sense to me as a buyer. Like Facebook, Google has YouTube. I could see Google buying TikTok and folding it into YouTube in some way, and so nothing would surprise me here. A bidding war wouldn't surprise me, or I still wouldn't fully rule out the idea of TikTok being allowed to spin out from ByteDance and go public. I think anything could happen here, and I certainly don't place much stock in the Trump claim about give the government a cut. I mean, that's not how this works, my friend.

- Oh my god, Dan. Yeah, I was going to acknowledge that point too. It's almost similar to extortion, right? And some Axios report this morning aptly pointed out that, unfortunately, that's the sort of thing that you hear when you're wiretapping somebody, and you get something, you know, under-the-radar sort of approach. Not explicitly a president saying to reporters that the treasury should be getting a cut of this deal.

Even if, in this hypothetical scenario, if ByteDance were saying, OK, we want to stay alive. We want to make sure that we can be fruitful here in the US, and we'll orchestrate some deal. Are you kidding me? Do you think that would go over well with the Chinese government? There's just no potential scenario where this could actually play out successfully. So, to your point, I think the ultimate route, and, as Myles Udland has pointed out, Kevin Mayer didn't leave Disney to run a company that would just be folded in somewhere else. So his goal, I imagine, as he runs the US operation, would be to spin off a company as its own entity. We'll see how this develops. The September 15 deadline that Trump supposedly has enacted for this deal to take place, it's approaching very soon.

- Right, and it's unclear what legal standing that has, let alone the legal standing that the administration would, would get a, a cut of this thing.