Toronto-based investor Kevin O’Leary, star of the reality TV show Shark Tank (and former star of CBC’s Dragons’ Den) has expressed interest in buying the popular social media app TikTok, going as far as initiating an online crowdfunding campaign to measure public support for this endeavor.
Once (if) the appropriate filings are made, investors could become part of an investment team aimed at transforming TikTok into a U.S.-based enterprise. At this stage, any potential investors who sign up via O’Leary’s website are simply making a “reservation” or indicating an interest in becoming an investor. If the offer goes through, investors will have a chance to confirm whether they’d like to complete their investment or not.
O’Leary’s move is in response to a recent US law requiring ByteDance, the China-based owner of TikTok, to separate from its US holdings and sell its American-based operations. This is over fears that data about millions of Americans could land in China’s hands. Due to these apparent nationwide security threats, ByteDance is required to sell the app to a U.S. entity by January 19, 2025, or face a nationwide ban.
“There’s no deal like this in history, that’s why it’s a legacy deal. It’s just the most unusual situation I’ve ever seen, and of course, that’s what intrigues me about it” O’Leary said in an Asset TV interview last Thursday. “I want to do this deal because it really is unique, and I think I can bring a lot of value going forward but I don’t know any of it yet because there’s nothing to buy.”
O’Leary said that the social media app is attractive because it’s one of the largest networks in the world, adding that its users are the “Shark Tank” generation, consisting of people in their 20s and 30s.
I’d like to democratize TikTok and turn it into a platform where the user data is protected from the prying eyes of foreign adversaries. It’s time to make TikTok WONDERFUL again. Want to be part of this? Go to https://t.co/pgFH0Y7ARB pic.twitter.com/2VhdEkQtfs
— Kevin O’Leary aka Mr. Wonderful (@kevinolearytv) June 5, 2024
“I’m very fortunate to have the Shark Tank platform. I’m guessing 99% of them know who I am, so I’m thinking I would be a good steward of this platform if and when it becomes available,” O’Leary, who is nicknamed ‘Mr. Wonderful’ added in the interview. He said his goal is to make the platform safer for those who use it, as well as make businesses more comfortable advertising on it and investing in its ability to sell goods and services.
“There’s been multiple attempts to sell it, they were not successful, and then all of a sudden—first time ever—congress passes a law that forces the sale, this is unprecedented,” O’Leary said, noting that “something’s going to happen”, and even if we don’t know what it is, there’s a lot of value there.
“But we don’t yet know the price, we don’t know the assets, we don’t know what we’re going to get. There’s also a lot of uncertainty.”
Still, he believe that the price, with the algorithm, is going to be around the $20–$30 billion ticket.
“My mandate really is to just make TikTok wonderful again,” O’Leary said.
Last month, TikTok and ByteDance sued in U.S. federal court, seeking to block the law that would force the divestiture of the app. Reports suggest that ByteDance would prefer to shut down TikTok rather than sell it if they exhaust all legal options to fight the legislation.
About 170 million Americans use TikTok every month (including about 6 in 10 teenagers, a fifth of whom say they are on it constantly, according to research by Pew Research Center). There was an estimated revenue stream of around $16 billion last year in the United States.
In Canada, TikTok is the third most-used social media platform, with about 14.89 million Canadian TikTok users; nearly 76 per cent of Canadians aged 18 to 24 are on TikTok, according to a 2022 survey from Toronto Metropolitan University’s Social Media Lab.
Last year, Canada banned TikTok on government-issued mobile devices over data security concerns, and in March, four of Ontario’s largest school boards started legal action against various social media platforms, including ByteDance Ltd. (who own TikTok), for disrupting student learning and the education system. So far, however, there are no plans for the app to be banned in Canada.
O’Leary believes that, after the U.S. shuts down TikTok, other countries will follow suit.
“Canada will shut it down, I’m speculating that, [and] the Europeans will—offer them an alternative,” O’Leary said.
