Twitter has reportedly thrown its hat in the ring for a potential deal with TikTok as the China-owned social media company races against the clock to avoid a ban in the United States.
US President Donald Trump signed an executive order last week banning anyone subject to US law from conducting transactions with TikTok’s parent company, ByteDance, citing national security concerns.
The order, which effectively bans TikTok in the US, comes into effect on 15 September.
It was also revealed last week that tech giant Microsoft has entered into official negotiations to acquire TikTok in the US, along with in Australia, Canada and New Zealand.
Now social media rival Twitter has also looked at a potential deal with TikTok, according to The Wall Street Journal.
The report says that Twitter is eyeing a “combination” with TikTok, and has held “preliminary talks” with ByteDance about the deal.
The report states that Twitter has talked up its smaller size compared to Microsoft, meaning it likely won’t face as much antitrust scrutiny over the deal.
But Twitter’s comparatively smaller size may mean that it will struggle to find the cash to potentially acquire TikTok.
According to The WSJ, TikTok’s US business alone is worth tens of billions of dollars, while Twitter’s entire market cap is less than $US30 billion.
Twitter also suffered a significant loss of more than $US1 billion in the last quarter.
“Twitter will have a hard time putting together enough financing to acquire even the US operations of TikTok,” University of Michigan professor Erik Gordon told Reuters.
“It doesn’t have enough borrowing capacity.
“If it tries to put together an investor group, the terms will be tough.
"Twitter’s own shareholders might prefer that management focus on its existing business.”
The WSJ report states that Microsoft is still the most likely company to acquire TikTok.
Last week, the tech giant confirmed that it had entered into negotiations with ByteDance to acquire TikTok in the US, and the Committee on Foreign Investment in the United States has been notified.
If the deal goes ahead, Microsoft would operate TikTok in the listed countries, and all personal user data will be transferred away from China.
TikTok has 45 days to find a suitor and complete a deal or face being banned in the US under a Trump executive order.
The order relates to TikTok and WeChat, and states that these companies capture “vast swathes of information” from users and that this “threatens to allow the Chinese Communist Party access to American’s personal and proprietary information”.
Specifically to TikTok, the order claimed the company could “potentially allow China to track the locations of federal employees and contractors, build dossiers of personal information for blackmail and conduct corporate espionage”.
“TikTok may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.”
The executive order came amidst growing concerns over the apparent potential for harvested user data being accessed by the Chinese government, although there is no evidence that this data has been passed on to the government.
Trump has set 15 September as the deadline for when a deal must be done and has also suggested that the US Treasury Department should be receiving “a lot of money” as part of any potential sale.