It is not only Microsoft that is interested in buying Tik Tok’s business in the United States, according to sources at the Wall Street Journal. Twitter has also held “preliminary conversations” about a possible acquisition, although few details are known at this time.
Twitter believes it has an advantage over Microsoft because of its size. Being much smaller, it would not have as many problems in antitrust analysis if it were to close a deal, according to informants.
The problem is that while “small size” may give advantages at that point, it could also be a disadvantage, since we are talking about a sale of some tens of billions of dollars, and that would be a serious obstacle when Twitter’s total market capitalization is “only” 29 billion.
Even so, if the deal is closed, it would call on the help of investors and they would take on a lot of debt, hoping to get the money back in the next few years.
It should be remembered that Twitter suffered a loss of more than $1.2 billion in its last quarter, a number large enough to imagine that it is not in a position to purchase part of Tik Tok.
Even so, Twitter’s purchase of TikTok would put it on a similar international footing as Facebook. If we add to the 186 million daily active users of Twitter those of Tik Tok in the United States, we would be talking about “a new giant”.
Note, however, that although Trump has given the company until September 15 to sell its U.S. operations, Tik Tok does not agree with the issue, so the sale may never happen.