TikTok US sale: Why experts say $14 billion price tag is undervalued?

The proposed deal, backed by President Donald Trump, would carve out TikTok US into a new joint venture, cutting ByteDance's stake to below 20 per cent

When US President Donald Trump first raised the prospect of banning TikTok over national security concerns more than five years ago, the Beijing-based app from ByteDance Ltd was the envy of the global tech industry. Its potent algorithm revitalised a stale social-media landscape by keeping users hooked through endless recommendations based on how they interacted with content.

 

But the $14 billion price tag floated for TikTok’s US business is substantially lower than earlier estimates that approached $40 billion. The rough figure, cited by US Vice President JD Vance, emerged as President Donald Trump advanced a plan for American investors to acquire the US arm from Chinese internet firm ByteDance Ltd.

 

 

TikTok sale: A low-ball valuation? 

Vance stated that the purchasers will “ultimately” determine the amount paid. While likely buyers such as Oracle Corp and Silver Lake Management LLC might welcome a low-ball valuation, ByteDance and its current investors could find it amusing or even insulting. The White House did not explain how it arrived at the $14 billion figure. TikTok’s Chinese parent, ByteDance, currently values itself at more than $330 billion, according to its new employee share buyback plan.

 

‘Price tag misaligned with reality’

 

Ashwin Binwani, founder of Alpha Binwani Capital, told Bloomberg that the proposal “could be the most undervalued tech acquisition of the decade”. He estimated the suggested figure amounts to roughly a third of TikTok’s true value. “By every major financial metric and peer comparison, this price tag looks dramatically misaligned with reality.” TikTok’s video-sharing platform ranks among the most popular US social media properties by average daily app usage and has spurred competing short-video services such as Instagram Reels and YouTube Shorts. 

 

TikTok was estimated to be worth $30 billion to $40 billion without the algorithm as of April 2025, Wedbush Securities analyst Dan Ives told Reuters. Alan Rozenshtein, a professor at the University of Minnesota Law School, was quoted as saying that the executive order left unanswered questions, including whether ByteDance would still control the algorithm.

 

  How to put a value on TikTok? 

Valuing TikTok has long been difficult, in part because of the complexity of its prized recommendation algorithm. Even under conservative assumptions, the US operation – the firm’s most lucrative market with 170 million active users – generates revenue north of $10 billion a year. At a $14 billion valuation, TikTok US would carry a price-to-sales ratio of roughly 1.4 times, comparable with mature, low-growth companies such as Exxon Mobil Corp and General Mills Inc. By contrast, Meta Platforms Inc trades at about 10 times sales and Alphabet Inc at around eight. “The suggested value looks like daylight robbery,” said Vey-Sern Ling, senior equity adviser for Asia technology at Union Bancaire Privée.

  Details of deal mechanics 

The transaction, which must be completed within 120 days, would spin off TikTok US into a new joint venture in which ByteDance’s stake would be reduced to less than 20 per cent to address US national security concerns. The executive order indicates the Trump administration is advancing the sale of TikTok’s US assets, but many details remain to be fleshed out – notably how the US entity would employ TikTok’s most important asset, its recommendation algorithm.