President Donald Trump signed an executive order Thursday blocking all transactions with ByteDance, the China-based company that owns TikTok, starting Sept. 20.
Trump cited a “national emergency with respect to the information and communications technology and services supply chain” as the reason for the moratorium, escalating a dispute with TikTok that could force an acquisition of some or all of the social app by Microsoft or another company.
BREAKING: President Trump just issued an executive order “on Addressing the Threat Posed by TikTok.” It takes effect in 45 days, prohibits “any transaction” with ByteDance, the Chinese company that owns TikTok, and will almost certainly face legal challenges. pic.twitter.com/Ma9XOfYgOB
— Hunter Walker (@hunterw) August 7, 2020
Trump initially announced his intention to ban TikTok last week but backed off of the plan after speaking with Microsoft CEO Satya Nadella about the American software giant’s plan to acquire TikTok’s business in the U.S. and a handful of other countries. Nadella and Trump agreed that acquisition talks would conclude by Sept. 15.
The new executive order, set to take place five days after that deadline, adds pressure to the negotiation talks. It also indicates that the president, who does not always follow through on bold propositions, means business.
The unusual executive order will almost certainly face legal challenges, however.
Trump also signed an executive order related to WeChat, owned by China-based tech giant Tencent.
Trump also signed an EO related to WeChat, saying: “WeChat automatically captures vast swaths of information from its users —threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.“
— Jennifer Jacobs (@JenniferJJacobs) August 7, 2020
Initially, Microsoft expressed an interest in taking over the app in the U.S., Canada, New Zealand, and Australia but The Financial Times reported Thursday that the company has discussed the possibility of buying TikTok’s business in Europe and India as well.
Mergers and acquisition experts are debating TikTok’s price tag, estimating it could sell for anywhere from $10 billion to $50 billion.
Microsoft is well-positioned to pay top dollar for the coveted app. Its market value is at $1.6 trillion, and its cash, short-term investments stood at $136 billion as of June 30. The company’s largest acquisition to date was the $26.2 billion purchase of professional social media network LinkedIn in 2016.
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