Wedbush analysts explore the potential acquisition of TikTok's US operations by Elon Musk's X platform, amid a looming Supreme Court decision on a TikTok ban set for January 19th. The report suggests that ByteDance might consider selling the US operations, excluding its algorithm, for $40-$50 billion. This move could significantly boost the value of Musk's X platform, possibly involving outside investments. Analysts note, "Given the strong and growing alliance between Trump and Musk, this is not a total shock route."
The backdrop of this potential deal is the high-stakes US-China relations, with 170 million US TikTok users at risk of losing access. The US Justice Department has labeled TikTok a "national security threat" due to its Chinese ownership. President Trump, set to be inaugurated on January 20th, opposes the ban and seeks a political solution, having met with TikTok's CEO in December.
Wedbush highlights that if the Supreme Court upholds the ban, Trump might instruct the Justice Department not to enforce it, allowing tech companies to avoid fines. The analysts emphasize that ByteDance is unlikely to sell TikTok with its algorithm, reducing the sale's value. TSLA was trading at $411.40, up 2.01% on January 14.