Tesla Stock Surges on Speculation of Elon Musk's TikTok Acquisition
Tesla (TSLA) stock surged 3% on Friday, buoyed by speculations that CEO Elon Musk could potentially acquire TikTok. The social media platform faces an imminent countrywide ban in the United States unless it secures an American buyer. Musk has emerged as the frontrunner for this acquisition.
On Friday, the Supreme Court rejected TikTok's appeal to overturn the federal law banning the platform. Major app stores could face penalties for offering TikTok. The ban is scheduled to take effect on January 19 unless TikTok's parent company, ByteDance, sells it to an American owner, as mandated by a federal law signed by President Biden in 2024. National security concerns related to the platform prompted this law.
"We believe ByteDance and ultimately Beijing are exploring the possibility of Musk/X acquiring TikTok's US operations," noted Wedbush analyst Dan Ives. "Beijing has a strong relationship with Musk, providing added assurance in this deal to avoid a TikTok ban."
Bloomberg reported earlier this week that Chinese officials were considering this option, citing anonymous sources. However, ByteDance has denied these claims, calling the report "pure fiction."
Meanwhile, former President Donald Trump has vowed to "save" TikTok. He has several options to consider, such as urging Congress to repeal the ban or extend the deadline for the sale.
"We maintain our view that Musk will play a crucial role in reaching a solution for TikTok," said Ives. "He could potentially lead a consortium to acquire the platform, which we estimate to be worth around $40 billion to $50 billion."
Musk has developed a close relationship with Trump during his presidential campaign, even securing a quasi-governmental position. Since Trump's election victory in early November, Tesla shares have surged 74% amidst the "Trump trade."