TikTok deal could face major hurdles fas questions surround billionaires stakes in China parent ByteDance | Latest Tech News
President Trump’s a lot touted TikTok deal could be going through a last-minute hitch – and it has to do with billionaires, taxes and China hawks in Congress, On The Money has realized.
Billionaire Jeff Yass – a major Trump backer in the 2024 election who heads the giant investment firm Susquehanna companions – is among those who could face the wrath of Congress or a major US tax levy if they’re pressured to promote their current stakes in TikTok’s Beijing-based proprietor, ByteDance, in order to buy into a new, US-controlled TikTok, according to insiders.
So are Bill Ford of General Atlantic Partners and personal equity powerhouse KKR. All have been big buyers in ByteDance and they’ve been planning to “roll” their shares into the new US-controlled company to keep away from hefty capital positive factors taxes.
China hawks in Congress have said in latest days that they may fastidiously review the “framework” for a US-led TikTok that President Trump announced earlier this week. AFP via Getty Images
Susquehanna is said to maintain a 15% stake in ByteDance and General Atlantic is seen holding an equally large place. KKR’s stake is around 1.7%.
The query is whether or not a roll-over comports with the current law demanding that the US majority controls TikTok. At least on paper, the Chinese shares could end up as most of the equity in the new company when you throw in the 19.9% stake promised to the mainland that will probably be held by ByteDance.
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The White House, for its half, believes the deal comports with the law. “There is no way the law prevents US investors from controlling the new company using their Chinese shares,” one White House insider told me. “They are US investors, Under the law that does not constitute further Chinese ownership that has to stop at 19.9%.”
Others concerned in the deal aren’t so sure. Congressional considerations are mounting that the deal still violates laws designed to ban TikTok if it’s not completely divorced from China.
Billionaire Trump backer Jeff Yass of Susquehanna Partners is among those who could face the wrath of Congress or a major US tax levy if they’re pressured to promote their current stakes in TikTok’s Beijing-based proprietor, ByteDance. yassprize.org
So are Bill Ford of General Atlantic Partners (above) and personal equity powerhouse KKR. Bloomberg via Getty Images
“If these guys who hold ByteDance stock want in, they are probably going to have to sell,” one potential equity investor told On The Money. “If this thing looks like it’s going to be majority owned or even close to it by the Chinese, Congress is going to go nuts.”
“I just don’t see how they sell a company that is controlled using mostly ByteDance stock as equity,” the equity investor added.
A rep for General Atlantic had no remark. Reps for Susquehanna and KKR had no quick remark.
China hawks in Congress have said in latest days that they may fastidiously review the “framework” for a US-led TikTok that President Trump announced earlier this week. Many need TikTok shut down because in addition to spying, they consider it serves up filth to customers in the US who are largely younger adults and youngsters.
China President Xi Jinping has agreed to enable US tech giant Oracle control and rewrite the app’s all-important algorithm, the key sauce that curates videos based on person preferences. POOL/AFP via Getty Images
Yass, Ford and the people at KKR could, of course, keep their ByteDance shares and make a new investment in the US company said to be value roughly $50 billion to appease Congress.
Another attainable resolution is that they don’t promote all their shares and roll some into the new company, which might imply the ByteDance shares could comprise as a lot as 49% of the equity, which could fulfill China hawks and their considerations over possession.
Or they could roll over their Chinese shares and let President Trump argue the deal passes legal muster.
As reported by On The Money this week, China President Xi Jinping has agreed to enable US tech giant Oracle control and rewrite the app’s all-important algorithm, the key sauce that curates videos based on person preferences, but which lawmakers declare is used by the Chinese to spy on US customers. Oracle is also a doubtless top investor in the new company.
That algorithm issue was thought-about a major hurdle in getting a deal – until the attainable ByteDance share issue emerged on Tuesday.
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