This article first appeared on GuruFocus.
The Trump administration has floated a $14 billion valuation for TikTok’s US business, a figure that has stunned investors and analysts who had pegged its worth closer to $40 billion. Vice President JD Vance, speaking Thursday, acknowledged that buyers would ultimately decide the price, but his comments reinforced President Donald Trump’s push for an American-led acquisition. Oracle (NYSE:ORCL) and Silver Lake are positioned as potential bidders, and while such a low entry point could look attractive for them, the figure is being called deeply misaligned with the platform’s size and earnings power. Ashwin Binwani, founder of Alpha Binwani Capital, said the proposed tag could be the most undervalued tech acquisition of the decade, estimating it reflects only a third of TikTok’s real value.
TikTok has become one of the most heavily used social media platforms in the United States, commanding 170 million active users and generating revenue north of $10 billion annually in this market alone. At the suggested $14 billion price, the US unit would be valued at just 1.4 times sales, putting it on par with mature, slower-growth companies such as Exxon Mobil or General Mills. By comparison, Meta’s Instagram trades at around 10 times sales and Alphabet’s YouTube at roughly eight. Analysts say this gap highlights the disconnect between TikTok’s market influence and the floated valuation, with some describing it as daylight robbery.
The plan would require TikTok’s US operations to be spun into a joint venture, with ByteDance’s stake cut below 20% to satisfy Washington’s national security demands. Trump has said Xi Jinping has offered his blessing, though Beijing has not confirmed this publicly, leaving the geopolitical dimension unresolved. Questions also remain about governance, since none of the anticipated buyers are consumer-facing internet operators. As Alvin Foo, a venture partner at Zero2Launch, put it, the deal resembles sell or stop, underscoring the pressure on ByteDance as it faces the 120-day deadline.