Former Treasury Secretary Steven Mnuchin is forming an investment group to buy ByteDance’s TikTok, as a bipartisan piece of legislation making its way through Congress threatens the company’s continuing existence in the US.
The House of Representatives passed a bipartisan bill Wednesday that, if enacted into law, would require ByteDance to either divest its major global app or face an effective ban on TikTok in the United States.
“I think the legislation should pass and be sold,” Mnuchin, who leads Liberty Strategic Capital, told CNBC’s “Squawk Box” on Thursday. “It’s a great business and I’m going to put together a group to buy TikTok.”
Liberty and ByteDance share common ground. Masa Son’s SoftBank Vision Fund made an investment in ByteDance in 2018 and is also a limited partner in Mnuchin’s Liberty Strategic.
The law is now on its way to the Senate, where its fate is uncertain; nevertheless, President Joe Biden has stated that he will sign the legislation if it reaches his desk.
“This should be owned by US companies. “There is no way the Chinese would ever allow a US company to own something like this in China,” Mnuchin stated.
Lawmakers on both sides of the aisle have cited TikTok’s reach in the United States — the app is used by 170 million Americans, according to its own estimates — as providing the Chinese government with easy access and influence in the country.
Major internet capitalists, including Peter Thiel, Vinod Khosla, and Keith Rabois, have publicly and privately condemned the social media site as having a negative effect.
However, it is uncertain whether the Chinese government would allow ByteDance to sell TikTok to a US bidder. TikTok has fought vigorously against the measure, including a concerted campaign among its user base and through videos on its platform.
TikTok CEO Shou Zi Chew has said that a sale is not an option. According to the Financial Times, China Foreign Ministry spokesperson Wang Wenbin condemned the bipartisan push as “robber’s logic” toward TikTok on Thursday.
According to PitchBook, ByteDance was valued at $220 billion during its most recent investment round in 2023. While a specific valuation for TikTok was not immediately available, any sale price for the U.S. branch would most likely be lower.
TikTok’s most significant asset, and politicians’ most concerning weapon, is its algorithm, which offers personalized material to consumers and was created in China. Any sale of TikTok without the algorithm would be substantially less appealing to potential buyers.
Mnuchin did not say who else would be involved in the transaction or how much the social networking site could be worth.
There are other interested purchasers. According to the Wall Street Journal, former Activision Blizzard CEO Bobby Kotick is negotiating a transaction with potential partners.
Last week, Mnuchin’s Liberty Strategic Capital led a $1 billion capital raising to bolster New York Community Bancorp.
Mnuchin worked as Treasury Secretary under former President Donald Trump. That administration also took a negative attitude on TikTok, resulting in ByteDance forming a data partnership with Oracle. Trump has since switched course and spoken out against a TikTok ban.