Former Treasury Secretary Steven Mnuchin says he's assembling investors to make bid to buy TikTok

ByElisabeth Buchwald and Matt Egan, CNN
Friday, March 15, 2024
Former Treasury Secretary Steven Mnuchin is interested in buying TikTok
Former Treasury Secretary Steven Mnuchin said Thursday he's assembling a team of investors to make a bid to buy TikTok.

Former Treasury Secretary Steven Mnuchin said Thursday he's assembling a team of investors to make a bid to buy TikTok.

This comes a day after the House passed a measure to ban the Chinese-owned social media giant or force a sale to a US-operated owner.

"It's a great business and I'm going to put together a group to buy TikTok," Mnuchin said in an interview on CNBC Thursday morning. Even though TikTok is likely unprofitable, "it's worth a lot of money," he added.

Mnuchin said he would give existing US investors the option to roll over their stakes in TikTok but stressed that no entity would have more than 10% control. But he declined to name any individuals on the team he's putting together.

"There's no way that the Chinese would ever let a US company own something like this in China," he said. From his time in the administration, he said he's seen evidence that having TikTok on your phone gives it the ability to "collect an awful lot of data."

But ByteDance, the parent company of TikTok, may never be allowed to be sold to any company outside of China because of measures the government began putting into place in 2020. The Chinese government deems TikTok a sensitive technology and officials have said they'd oppose any forced sale that would involve exporting it into the hands of a foreign owner.

RELATED: Here's what TikTok ban could mean for users, businesses ahead of Congress vote

Mnuchin and TikTok didn't immediately respond to CNN's requests for comment.

Dan Ives, senior equity analyst at Wedbush Securities, told CNN that ByteDance and China will "never" sell TikTok with the source code - the "special sauce" that makes the app so successful and valuable.

"Without the source code, this would be like buying an F1 car without the engine. It would be illogical," Ives said.

Mnuchin, though, said he's looking to find a solution where the Chinese government will allow TikTok to be sold without a technology transfer.

Mnuchin, who now leads Liberty Strategic Capital, a private equity firm, was an early advocate for forcing a sale of TikTok to a US company. But he faced opposition from other members of former President Donald Trump's cabinet when the sale was proposed in 2020. Trump supported a ban at the time. He's since changed his stance, arguing that it would benefit Facebook.

"Facebook has been very bad for our country," he said in a separate interview on CNBC earlier in the week. Meta, the parent company of Facebook, didn't immediately respond to CNN.

"I believe he would support a sale," Mnuchin said Thursday, referring to Trump. "I'll call him up later and ask him." He added that he's been in touch with the former president in recent weeks regarding TikTok but has not discussed his nascent effort to acquire it.

RELATED: House passes bill that could ban TikTok despite resistance from Donald Trump

Thursday's TikTok news comes just one week after Mnuchin led a $1 billion lifeline rescue of embattled regional lender New York Community Bank.

The TikTok bill the House passed is now heading to the Senate, where it faces a much larger uphill battle in getting approved. President Joe Biden said he would sign the bill into law if the Senate passes it. Even if that happens, any kind of TikTok ban would likely be fought in courts. Already Montana was prevented from moving forward with a law to effectively ban the app after a federal judge blocked it last year.

Ives, the tech analyst, said he sees a 25% chance that the TikTok legislation ultimately becomes law, forcing a sale of the company. He said countless parties are undoubtedly considering making an offer to buy TikTok should it go up for sale.

"It's sharks. They see blood in the water," he said.

However, the more likely buyer, according to Ives, would be a tech giant like Microsoft or Oracle, which already has a relationship with TikTok, and not a financial player like Mnuchin.

(The-CNN-Wire & 2023 Cable News Network, Inc., a Time Warner Company. All rights reserved.)