TikTok Deal: Trump Favors Musk or Ellison Purchase with US Share
Washington, DC: President Donald Trump has expressed support for a potential acquisition of TikTok by either Elon Musk or Larry Ellison, with a condition of a 50% stake for the US.
Trump's Proposal
"I would be if he wanted to buy it," Trump said of Musk, referring to the owner of electric vehicle company Tesla. He also indicated a preference for Oracle Chairman Larry Ellison to acquire the platform.
The arrangement would involve the US granting a "permit" in exchange for half of TikTok. "I have the right to make a deal," Trump stated. "So what I’m thinking about saying to somebody is buy it and give half to the United States of America, half, and we’ll give you the permit, and they’ll have a great partner.”
Ellison's Response
Ellison responded positively to the proposal, saying: "It sounds like a good deal to me, Mr. President."
Legal Considerations
Experts caution that a joint venture may not be sufficient to meet legal requirements for a "qualified divestiture." The Protecting Americans from Foreign Adversary Controlled Applications Act mandates a complete severing of TikTok's relationship with ByteDance, its Chinese parent company.
"As I read the statute, the idea is to get that foreign connection off the table, and a joint venture doesn't seem like it would do that,” said Jonathan Entin, a law professor at Case Western Reserve University.
Other Challenges
Constitutional law experts argue that a 50-50 deal could violate the spirit of the law, which aims to address national security concerns. Additionally, challenges to the president's executive order delaying the TikTok ban could arise, as the order goes beyond the scope of the law.
Potential Bidders and Implications
Dan Ives, head of tech research at Wedbush Securities, believes that Musk is in a strong position to acquire TikTok, given his connections in China. Oracle could also participate through its hosting services. A consortium led by Musk is another possibility.
The deal could have significant financial implications, with Ives expecting numerous bids. It could also impact trade negotiations between the US and China. Trump has floated the idea of tariffs if a suitable buyer is not approved.