Benzinga - by Shivani Kumaresan, Benzinga Staff Writer.
The future of TikTok in the United States hangs in the balance as its parent company and Meta Platforms Inc’s (NASDAQ:META) rival, ByteDance, considers shutting down the app rather than selling it amid legal battles.
According to a report from Reuters, four sources close to the matter revealed that if ByteDance exhausts all legal options against the impending ban, it may opt for a shutdown over a sale.
TikTok’s core algorithms, integral to ByteDance’s operations, make a sale unlikely. The app contributes a small share to ByteDance’s revenue, leading the parent company to prefer a shutdown over selling to a potential American buyer.
Shutting down TikTok would have minimal impact on ByteDance’s business and allow it to retain its core algorithm, the report said.
Also Read: TikTok Parent ByteDance’s Profits Rise 60% Year-Over-Year As Company Grapples With Potential US Ban
In a statement posted on Toutiao, ByteDance denied plans to sell TikTok, countering reports suggesting otherwise.
TikTok CEO Shou Zi Chew expressed confidence in overcoming the legal challenges posed by U.S. legislation to ban the app.
The legislation signed by President Biden gives TikTok's parent company, ByteDance, nine months to sell the app or face a national ban, with the possibility of a 90-day extension by the President.
TikTok’s U.S. revenues accounted for approximately 25% of its total last year, highlighting its significance.
Despite interest from investors like former U.S. Treasury Secretary Steven Mnuchin, ByteDance may need help attracting buyers for TikTok’s U.S. assets sans algorithms.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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