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ByteDance may sell off TikTok stake to avoid US backlash

The sale is rumored after the app is accused of being a national security threat.
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Chinese company ByteDance's TikTok app is popular with young people across the globe for posting fun videos. However, recently security concerns about the app have been raised in the US, with senators requesting an assessment of its potential as a national security risk and the US Navy banning the app from government-issued phones. Now, the company's leadership is considering how to address these concerns, according to Bloomberg.

Sources who spoke to Bloomberg said that the company is considering selling off a majority stake of TikTok to financial investors, in order to protect the business. By selling off a part of the company, leadership could raise money before a potential fall in value caused by legal issues in the US.

Other solutions rumored to have been considered include an "aggressive legal defense," which may be the company's preference as ByteDance reportedly "would prefer to maintain full control of the business." It may be possible for the company to argue that, unlike a similar case with gay dating app Grindr, the type of information posted on TikTok is not sensitive data.

ByteDance has publicly denied the rumors about a potential sale of the business, according to the South China Morning Post. A company representative said the rumors were "completely meritless."

However, trust in ByteDance is low in the US, with accusations that the app censors criticism of China, especially about the Chines government's oppression of Uighur Muslims in the country.

Source: Bloomberg
Coverage: Reuters
In this article: business, bytedance, entertainment, tiktok
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