Trump Endorses Musk or Ellison as TikTok Buyer, Outlines Potential Deal Structure

Key Points:

* President Trump supports potential acquisitions of TikTok by Elon Musk or Larry Ellison.
* Trump proposes a "joint venture" where the US acquires half of TikTok in exchange for a "permit."
* Legal experts express concerns that a joint venture may not meet statutory requirements for divestiture.
* TikTok's Chinese parent company, ByteDance, would need to approve any potential deal.
* Other legal challenges could arise before any deal is finalized, including challenges to Trump's executive order delaying the TikTok ban.

Trump's Stance on TikTok Acquisition

President Donald Trump has expressed support for Elon Musk or Larry Ellison purchasing TikTok. When asked by a reporter, Trump stated, "I would be if he wanted to buy it," referring to Musk. He also voiced his approval for Ellison's potential acquisition.

Proposed Deal Structure

Trump outlined a potential deal structure that involves the US government providing a "permit" in exchange for acquiring half of TikTok. The President asserted, "I have the right to make a deal. 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."

Legal Considerations

Legal experts have raised concerns that a joint venture ownership structure may not meet the legal requirements for divestiture under the Protecting Americans from Foreign Adversary Controlled Applications Act. This act prohibits TikTok's app from operating in the US unless ByteDance, TikTok's Chinese parent company, completes a "qualified divestiture."

According to Nicholas Creel, a business law professor, TikTok must be banned if foreign nationals from adversary countries own 20% or more of the company. A qualified divestiture requires a complete severance of ByteDance's "operational relationship" with TikTok.

Potential Challenges

Legal challenges could arise before any potential deal is finalized. Jared Carter, a constitutional law professor, anticipates challenges to a 50-50 deal between the US and ByteDance. He states that the law requires divestiture to an American company.

Carter also believes that a joint venture would violate the spirit of the law, which aims to address national security concerns. Other legal challenges could include questions about the President's authority to issue an executive order delaying the TikTok ban.

Potential Wiggle Room

Despite legal concerns, Jonathan Entin, a law professor, suggests that Trump may have some flexibility to implement his proposed joint venture idea. He notes that potential legal challenges would require standing parties, such as TikTok's competitors.