Former Treasury Secretary Steven Mnuchin is building an investor group to acquire TikTok, responding to ongoing legislative actions that could ban the app unless it divests from its Chinese parent company, ByteDance.
Key points:
- Mnuchin, who served in the Trump cabinet, told CNBC’s “Squawk Box” Thursday that he is “going to put together a group to buy TikTok.”
- The day prior, the House of Representatives passed a bill (352-65) that would force the social video app into a U.S. sale or face a blanket ban in the country.
- TikTok, which boasts more than 170 million U.S. users, has been the subject of national security concerns for years. Trump sought to ban the app during his term but recently reversed his position.
The details:
- Mnuchin, who currently leads Liberty Strategic Capital — a private equity firm — has not named individuals in the group he is forming. However, he said it would have “a combination of investors” and that no entity would have more than 10% control.
- SoftBank Vision Fund, a limited partner of Liberty Strategic, invested in ByteDance in 2018. This connection may be crucial in Mnuchin’s acquisition plans.
- Still, it is unclear whether a U.S. sale of TikTok is possible due to measures the Chinese government put in place back in 2020. China sees TikTok’s technology as sensitive and is poised to veto any forced foreign sale.
- Those measures came as the Trump administration worked to broker a deal that would have had Oracle and Walmart take a large stake in TikTok. Microsoft also made a failed bid for the app.
- TikTok, for its part, has long denied allegations that it is being used as a tool of the Chinese government. In late January, CEO Shou Zi Chew defended the app for a second time in Congress.
What’s next:
- Mnuchin said he will speak to Trump, whom he believes will support the sale. Meanwhile, the bill is headed to the Senate, with President Joe Biden vowing to sign it when it reaches his desk.
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