Trump says he will ban TikTok through executive action TODAY!

Written By BlabberBuzz | Source: CNBC World-News | Saturday, 01 August 2020 01:00

President Donald Trump on Friday told reporters he will act as soon as Saturday to ban Chinese-owned video app TikTok from the United States, NBC News reported.

Trump made the comments while chatting with reporters on Air Force One.

"As far as TikTok is concerned we're banning them from the United States," Trump said. 

Trump did not specify whether he will act through an executive order, or another method such as a designation.

"Well, I have that authority. I can do it with an executive order or that," Trump said.

Trump's comments come as it was reported Friday that Microsoft has held talks to buy the TikTok video-sharing mobile app from Chinese owner ByteDance, one person close to the situation told CNBC. This person characterized the talks as having been underway for some time, not brand new. 

Trump told reporters that he firmly rejected the reported spinoff deal involving Microsoft buying TikTok, NBC News reported.

A TikTok acquisition could make Microsoft, a major provider of business software, more concentrated on consumer technology, which Microsoft has moved away from somewhat in recent years, by exiting the smartphone hardware, fitness hardware and e-book markets.

Chinese company ByteDance launched TikTok in 2017. The app has grown more popular during the coronavirus pandemic, with 2 billion downloads in April, according to Sensor Tower. Competitors include Facebook and Snap.

ByteDance investors seeking to take over TikTok have valued it at $50 billion, Reuters reported earlier this week.

The rise of TikTok in the U.S. has prompted the Trump Administration to scrutinize the app.

Microsoft declined to comment on the talks, which were first reported by Fox Business Network.

"While we do not comment on rumors or speculation, we are confident in the long-term success of TikTok," TikTok said in a statement Friday.

Trump said Wednesday alongside Treasury Secretary Steven Mnuchin that the administration was "looking at TikTok." "We are thinking about making a decision, Trump said on the South Lawn of the White House.

Earlier this month, Secretary of State Mike Pompeo said the U.S. was looking at banning TikTok as well as other Chinese social media apps, citing national security concerns. Pompeo added that the Trump administration was evaluating TikTok akin to Chinese state-backed tech companies Huawei and ZTE, which he has previously described as "Trojan horses for Chinese intelligence."

"U.S. officials have long complained that Chinese intellectual property theft has cost the economy billions of dollars in revenue and thousands of jobs and threatens national security. Beijing maintains it does not engage in intellectual property theft.

The move by the Trump administration represents another step in the deteriorating relations between Washington and Beijing and comes a week after the U.S. closed the Chinese consulate in Houston, prompting China to shutter the U.S. consulate in Chengdu.

The Pentagon has taken concrete steps to discourage U.S. service members and their families from using Chinese-backed tech.

In December, the Defense Information Systems Agency advised that all Department of Defense personnel should not use the Chinese-owned social media platform, citing a "potential risk associated with using the TikTok app." A year earlier, the Pentagon halted sales of Huawei and ZTE mobile phones and modems on military bases around the world again citing national security concerns.

— CNBC's Steve Kopack and NBC's Josh Lederman contributed to this report

VIDEO1:4201:42 The U.S. is looking at banning TikTok—Here's what you should know News Videos

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Microsoft, TikTok don't need to make sense if deal is too good to pass up

This article was sourced from CNBC US-News

Microsoft is in talks to acquire TikTok.

Strategically, this doesn't make a lot of sense for Microsoft, which has been steadfastly focused on enterprise software under Chief Executive Officer Satya Nadella and has seen its market valuation balloon to more than $1.5 trillion because of it.

 

But Microsoft should absolutely try to acquire TikTok. Any company with the means to do it should.

TikTok is supremely positioned to explode from a valuation standpoint. It is just now beginning to monetize its huge audience with advertisements, and curated, targeted, clever short-form video ads are perfect for a younger audience that skips or pays to ignore traditional TV commercials. ByteDance would be selling just as TikTok is about to take off. Unfortunately for the Chinese-based company, U.S. president Donald Trump is expected to order ByteDance to divest the U.S. part of the business for security reasons. 

"While we do not comment on rumors or speculation, we are confident in the long-term success of TikTok," TikTok said in a statement on Friday. "Hundreds of millions of people come to TikTok for entertainment and connection, including our community of creators and artists who are building livelihoods from the platform. We're motivated by their passion and creativity, and committed to protecting their privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform." 

Sometimes, if an asset is cheap enough, the synergies don't matter. Take CNBC's parent company, Comcast, which acquired 51% of NBCUniversal from General Electric during the 2009 financial crisis for the now-laughably low price of $13.75 billion. Two years later, Comcast bought the other 49% for $16.7 billion. Last year, NBCUniversal posted EBITDA of $8.7 billion, suggesting a pre-pandemic valuation well north of $60 billion. 

As Morgan Stanley Vice Chairman Robert Kindler said this week, there are no obvious synergies between TV content ad distribution. But that doesn't mean Comcast made a mistake buying NBCUniversal.

The counterargument is Microsoft could screw up TikTok. It does have some history botching consumer-facing acquisitions, such as Skype and Mixer. But simply bringing in TikTok and letting it do its thing isn't overly complicated. 

It's unclear how much TikTok's U.S. operations would cost, but Reuters reported TikTok investors value the entire business at $50 billion. Given Facebook today is worth about $725 billion, there's evidence that popular global social networks that can monetize advertising have some major growth possibilities.

Microsoft does have some consumer-facing products, such as Minecraft and XBox. But most importantly, it wasn't one of the big four technology companies -- Apple, Amazon, Facebook and Google -- that just this week testified before Congress about having too much power. Perhaps it should have been. For the last few years, it's been right alongside Apple as one of the most valuable companies on the planet.

But if Microsoft sees a window to help the U.S. government score a victory over China, antitrust considerations likely won't come into play. Nadella may be focused on businesses, but he probably knows a good deal when he sees one.

Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.

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This article was sourced from CNBC World-News

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