Tesla Stock Surges on TikTok Acquisition Speculation
Tesla (TSLA) shares jumped 3% on Friday following reports that CEO Elon Musk may be considering purchasing TikTok. The social media platform is facing a countrywide ban in the United States if it cannot find an American buyer by next week. Musk is reportedly the frontrunner to acquire the app.
US Supreme Court Rejection
The US Supreme Court recently rejected TikTok's appeal to overturn a federal law banning the platform. The ban penalizes app stores for offering TikTok, set to take effect on January 19th. However, the Chinese parent company, ByteDance, could avert the ban by selling TikTok to an American buyer.
Musk's Potential Involvement
Analysts speculate that Musk's close relationship with the Chinese government could facilitate a potential deal. Bloomberg sources suggest that Chinese officials prefer TikTok to remain under ByteDance's ownership, but Musk remains a viable option. TikTok has denied these claims.
Trump's Intervention
Former President Donald Trump vows to "save" TikTok. He could repeal the ban or extend the deadline for the TikTok sale.
Analysts' Outlook
Analysts believe Musk could be instrumental in finding a solution for TikTok, potentially leading a consortium to purchase the app. The estimated valuation of TikTok ranges between $40 billion and $50 billion.
Trump Connection
Musk's growing alliance with Trump has coincided with a surge in Tesla's stock price, up 74% since Trump's election in November.