The curious case of TikTok in the US has taken a new turn today with Twitter emerging as the latest candidate to purchase the short-video maker app. According to a report by the Wall Street Journal, Twitter has held a “preliminary talks” with TikTok to merge its business with the Chinese app.
One of the major reasons why Twitter believes that it has the edge over Microsoft is the fact that it is comparatively smaller than the Windows maker company, and that would help it in attracting no antitrust scrutiny.
However, the fact that Twitter is much smaller in business and economic value could also mean that the social media company might have to borrow large loans to bring the deal to fruition. Twitter has a market cap of $29 billion whereas, TikTok’s US business could cost around tens of billions, and therefore, chances of a deal are a long shot.
From a financial point of view, Twitter isn’t in the position to buy a behemoth like TikTok as the Jack Dorsey-headed company has suffered a loss of $1.2 billion in the last quarter and a merger with TikTok could prove to be a costly affair.
Twitter’s interest in TikTok could be related to its failed stint in the short video app niche. In 2012, the social media giant acquired Vine, a short video making app, but was unable to bring any success to the app and finally shut it down four years down the road.
Twitter isn’t the only company that has shown interest in purchasing TikTok’s US business. Apple, Facebook, Google, Twitter, and Microsoft were reportedly competing to buy TikTok, but only Microsoft has openly accepted that it is a “potential” buyer.
Now that President Trump has signed the executive order for TikTok’s ban in the US after 45 days if an American company does not purchase it, we could expect more offers from other buyers in the remaining days as Chinese company looks forward to closing the deal soon.
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