House lawmakers want a TikTok sale. Good luck with that.

If TikTok winds up connected nan auction artifact — and that's a large if — erstwhile Treasury Secretary Steven Mnuchin is interested. 

Mnuchin, who served nether erstwhile President Donald Trump, told CNBC's Squawk Box connected Thursday that he plans to put combine an finance group to bargain TikTok. "This should beryllium owned by U.S. businesses. There's nary measurement that nan Chinese would ever fto a U.S. institution ain thing for illustration this successful China," Mnuchin said. 

Mnuchin's remarks came aft nan House voted 352-65 to a measure that would prohibition nan celebrated societal media app successful nan U.S. if its China-based owner, ByteDance, declines to waste its stake. He offered nary specifications astir who mightiness subordinate nan investor group aliases astir TikTok's imaginable valuation. 

After nan House's different show of bipartisanship, nan measurement is now headed to nan Senate, wherever it faces an uncertain fate. President Joe Biden has already said he will motion nan measurement into rule if it reaches his desk.

Should nan measurement beryllium enacted, Bytedance would person six months to afloat divest its U.S. TikTok operations to different non-Chinese entity. Barring specified a transaction, it would beryllium forbidden for app shop operators for illustration Apple and Google to make it available.

Who mightiness want to bargain TikTok?

While successful nan White House, erstwhile President Donald Trump successful 2020 ordered TikTok beryllium sold to to an American company, with Walmart and Oracle interested successful acquiring it. But that woody was yet shelved arsenic nan Biden management continued nan anterior administration's attraction connected nan imaginable nationalist information risks posed by Chinese exertion companies.

After initially starring nan complaint to prohibition TikTok, Trump now opposes nan measure to unit a sale, pinch nan statesmanlike campaigner arguing the measure would empower Facebook, which he has bashed for its alleged domiciled successful his 2020 predetermination loss. 

Should TikTok beryllium made disposable for sale, a number of financial and exertion companies would apt beryllium willing contempt what's definite to beryllium an "eye-popping" value tag, WedBush Securities analysts said successful a report. 

"Private equity pinch a imaginable consortium will look astatine TikTok, and a number of tech stalwarts will besides apt attraction connected TikTok including Microsoft, Apple, Oracle, and/or associated bids from a fistful of Big Tech players depending connected nan building and value tag," they said.  

Other imaginable bidders see erstwhile Activision Blizzard CEO Bobby Kotick, who has floated nan thought to imaginable partners, according to the Wall Street Journal, which pegged immoderate value tag beryllium successful nan hundreds of billions of dollars. 

ByteDance was weighted astatine $220 cardinal astatine its past backing information successful 2023, according to CNBC, citing Pitchbook data. TikTok had world gross past twelvemonth of $36.9 billion, according to an October estimate by eMarketer. The investigation patient forecast those revenues to reach  $46.6 cardinal and $56 cardinal successful 2024 and 2025, respectively.

Beyond nan important value tag for TikTok and immoderate nan governmental impetus for a deal, nan regulatory ambiance successful Washington, D.C., could inhibit a waste to a U.S. buyer, analysts said. Amazon, Google and Meta each presently look lawsuits by U.S. Justice Department for antitrust violations, making it little apt that immoderate of nan exertion giants would acquisition an app pinch 170 cardinal American users. Apple and Microsoft would apt look akin hurdles. 

ByteDance could besides activity to rotation TikTok disconnected successful an first nationalist offering. But disentangling nan platform's algorithms — nan beating bosom for immoderate societal media patient — from its firm genitor would beryllium analyzable and impact aggravated scrutiny from U.S. regulators.

Long march to a deal

Meanwhile, nan governmental roadworthy for TikTok remains uncertain contempt nan governmental heat. Wedbush puts nan likelihood of TikTok getting banned successful nan U.S. astatine only 25%.

A Senate measure requiring ByteDance to trim ties pinch TikTok would require 60 votes to walk — a gangly bid moreover fixed a measurement of bipartisan support for specified legislation. 

It would besides require Senate Majority Leader Chuck Schumer to bring nan measure to a vote. If nan New York Democrat thinks a ballot to prohibition TikTok could harm nan prospects for his statement successful tight races, Schumer could determine against bringing nan measure for a vote, Wall Street analysts said.

Even assuming a prohibition becomes law, ineligible challenges from ByteDance would besides apt hold nan process.

"We person nary measurement to handicap what happens if this lawsuit wherever to yet scope nan Supreme Court, pinch ByteDance/TikTok arguing free speech, while nan U.S. authorities argues nationalist information concerns," said LightShed Ventures expert Richard Greenfield. 

Perhaps nan biggest obstacle to a TikTok woody would beryllium getting nan Chinese authorities to cooperate, fixed that Beijing has said it would staunchly opposed a forced sale. 

"China and Bytedance will ne'er let nan root codification to beryllium sold to a U.S. tech institution successful our view, which makes this each a spiderweb rumor for immoderate imaginable strategical buyer," Wedbush said successful its report.

"There is still a agelong and uncertain roadworthy up to really forcing ByteDance to divest TikTok aliases beryllium banned from nan U.S. Importantly, we do not expect ByteDance to judge a TikTok divesture," Greenfield said. 

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