TikTok’s Parent Said to Weigh Selling a Majority Stake in the Video App


ByteDance, the parent company of TikTok, is weighing its ownership options for the popular video app after the Trump administration threatened to ban the app from the United States this month, according to people briefed on the discussions.

One path that ByteDance, a privately held company in China, is discussing with its biggest backers is a potential deal that would essentially carve out the app, said the people, who were not authorized to speak publicly. Under that plan, TikTok would receive new investments from existing ByteDance investors — including the investment firms Sequoia and General Atlantic — with the Chinese company retaining a minority holding, these people said.

ByteDance has raised billions in funding and is valued at $100 billion, according to the research firm PitchBook. Its other investors include Tiger Global Management, KKR, NEA, SoftBank’s Vision Fund, GGV Capital and Hony Capital.

The talks, which were reported earlier by The Information, are at a preliminary stage, these people cautioned, and no option has been decided.

The panel could ultimately order ByteDance to divest Musical.ly’s American assets, or at least change how it transfers and stores data around the world.

In February, Senator Josh Hawley, Republican of Missouri, criticized what he called a “pattern of secrecy” around ties between China and TikTok and Apple. This month, Secretary of State Mike Pompeo said the administration was considering banning Chinese social media apps on national security grounds.

In response, TikTok announced that it would evaluate changes to its corporate structure.

Criticism of TikTok’s Chinese ownership is a bipartisan issue: A defense spending bill approved by the Democratic-controlled House this week includes a provision that would ban use of the video app on government devices.

This month, Amazon told its employees to delete TikTok from their phones, citing security concerns, but backtracked hours later. Other companies, including Wells Fargo, went through with the bans. Branches of the U.S. military have barred personnel from using the app.

The United States is not the only country to express reservations about TikTok. India banned the app and dozens of other Chinese services last month over national security concerns.

ByteDance has rejected claims that it is a national security risk, saying TikTok is run separately from its Chinese operations and pointing out that the app is unavailable in China. In recent weeks, the app has enlisted a bevy of lobbyists to press its case in the halls of Congress, though its executives have declined to testify before lawmakers.

ByteDance also hired Kevin Mayer, a respected American senior executive at the Walt Disney Company, as TikTok’s chief executive this year. Peter Navarro, a senior White House trade official, has since called Mr. Mayer an “American puppet” for ByteDance.



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