ByteDance, a Chinese company is the owner of the very famous video sharing platform, TikTok. With the advent of the global pandemic which emerged out from the Chinese city Wuhan, many nations have turned against China. Whether it’s a serious innocent breakout of an infectious disease or a plotted biological weapon is still in question. But, with almost every country around the globe suffering tremendously, many unpredictable decisions have been taking place.
Last week, Trump announced the ban of TikTok along with other Chinese apps from the U.S. Apart from all the other Chinese applications; TikTok has a very wide user base not only in the U.S. but also around the world. Trump has expressed the need of the hour to ban these Chinese apps as they might be responsible for serious data theft that can put the nation’s security in jeopardy. So, with a 45-days timeline to ban the usage of any Chinese apps by the U.S. citizens, Microsoft showed interest in buying the U.S. operations of TikTok. But, it is only yesterday that Twitter showed interest in buying the same by outdoing Microsoft in bidding.
Can Twitter manage to Finance?
Yesterday, the news of Twitter being interested to buy ByteDance owned TikTok was delivered to Reuters from a trusted source. But, it is a big question if Twitter has the capital to buy the U.S. operations of TikTok. The market capitalization of Twitter is around $30 billion which is nearly equal to the assets of TikTok put on sale. On the other hand, Microsoft’s market capitalization is around $1.3 trillion which makes the scenario clear about the bidding.
So, if Twitter is having a serious plan to buy the U.S. operations of TikTok, it needs to raise additional capital. In a normal situation, it would have been easy to raise money, but with the pandemic creating havoc in the financial world and a time strain of 45-days it is a very difficult task.
Due to these two important factors, Microsoft is still on the run and occupy the first place for the bidding. Erik Gordon, a professor from the University of Michigan said that Twitter doesn’t have enough borrowing capacity making it even harder to acquire the U.S. operations of TikTok. Moreover, the current shareholders of Twitter might think that expanding business in this crisis might be a big risk and it will be better if the company (Twitter) focuses on its existing business.
Protecting the Nation
A couple of months back India decided to take strict action against China because of two main reasons, first the outbreak of COVID-19 from Wuhan which might be a strong conspiracy against the world, and second, the dispute regarding LAC. So, Indian banned all the Chinese apps hence taking a big step and protecting the nation’s security from compromising. Now, a similar action was taken by the American president, Donald Trump, thus banning Chinese apps like TikTok and WeChat.
Trump has also mentioned that this is one step forward towards protecting sensitive information and privacy of U.S. citizens from China. These apps are gaining access to information of every user and it can be used against the U.S. for many purposes. He also told that the ban of Chinese apps will also improve Clean Network thus adding five more lines of effort, namely, Clean Carrier, Clean Cable, Clean Apps, Clean Store, and Clean Cloud. And, lastly, he gave a deadline of 45 days and in mid-September, the ban will be imposed completely.
TikTok’s current reputation
With the novel coronavirus pandemic, the reputation of China as well as its apps is degrading. But, TikTok is used by billions of users around the world, and especially in the U.S., it has millions of fans. Many citizens of the U.S. have expressed outrage towards Donald Trump after he declared the ban of TikTok. But, no matter what a nation’s security should always be the priority. Moreover, it will also become a golden opportunity for the country’s app developers to create something similar and make it a big hit.
The relationship between Twitter and Donald Trump has become sour as the president accused the platform of unfairly censoring him. So, apart from the capital of Microsoft being incredibly bigger than Twitter’s, it is likely Trump will support the acquisition by Microsoft.
Annasha Dey is an NIT student, who apart from studying engineering is also a content writer. She has a great interest in photography, writing, reading novels, and travelling as well. She is a foodie who loves socializing and hanging out with her friends. She is also a trained Kathak dancer and a big fashion enthusiast. Dey also loves watching TV series, which includes F.R.I.E.N.D.S. and Big Bang Theory. To be a better writer she prefers to read more