Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: Welcome our Bloomberg Television and Radio audience as we continue
Speaker 2: to discuss TikTok's future in America with the man who
Speaker 2: wants to buy the US arm of the company. That's
Speaker 2: Frank McCourt, junior founder of Project Liberty and executive chairman
Speaker 2: of McCourt Global. It joins us. Now, Frank, really good
Speaker 2: to get your perspective. You've made that formal bid for
Speaker 2: TikTok through Project Liberty. Do you know yet of TikTok
Speaker 2: is for sale?
Speaker 3: Well, no, we're about to find out. And let's steal
Speaker 3: a quick fly over here.
Speaker 4: Where are we?
Speaker 3: So? The Supreme Court ruled nine to zero that the
Speaker 3: TikTok must be either shutdown or sold. They also, by
Speaker 3: the way, we're very explicit about the national security threats
Speaker 3: of TikTok as it's currently designed. And this is a
Speaker 3: key point because the legislation that they upheld was very
Speaker 3: clear that this is a national security threat. The Supreme
Speaker 3: Court just validated that and reaffirmed that. So if it's sold,
Speaker 3: because the choice is bann or sell. If it's sold,
Speaker 3: whoever buys it has to fulfill the criteria that the
Speaker 3: Supreme Court laid out. You need to disentangle the user
Speaker 3: base and the data from the Chinese technology project. Liberty
Speaker 3: has a clean tech stack to onboard the user base
Speaker 3: and the data and meet the criteria laid out by
Speaker 3: the Supreme Court.
Speaker 2: Frank, do you have an I mean, I'm sure you
Speaker 2: have an idea of how much you would pay for it,
Speaker 2: but can you help me understand how you came to evaluation.
Speaker 4: Yeah, well, you know it's worth something.
Speaker 3: And on the other hand, we know what the you
Speaker 3: know what the entire company is worth on the secondary market.
Speaker 4: You know what people are selling shares for now, so
Speaker 4: you have bookends.
Speaker 3: And then we know that us TikTok is somewhere around
Speaker 3: eight percent ten percent the entire platform, so you have
Speaker 3: an ability there to be able to bookend or frame
Speaker 3: the valuation. Of course, we've done extensive modeling to sharpen that. Now,
Speaker 3: the one big if is what exactly are they selling?
Speaker 3: Are they selling the brand or not? Which of the
Speaker 3: assets are they selling? Of course, the user base and
Speaker 3: the data are.
Speaker 4: What's critical to us.
Speaker 3: But what we know for sure is they're not selling
Speaker 3: the algorithm, and that is key. If you come forward
Speaker 3: with all the money in the world and say I'll
Speaker 3: buy us TikTok, but I need the algorithm. You're not
Speaker 3: going to get it because the legislation won't allow it.
Speaker 3: And the Supreme Court upheld that legislation and said any
Speaker 3: buyer must to be eligible, must not use or rely
Speaker 3: on any of the Chinese technology that is really fundamental
Speaker 3: to this transaction. So of course it's about the money,
Speaker 3: but it's about having the technology to onboard the user
Speaker 3: base and the data without relying on the Chinese technology.
Speaker 1: Frank Roman here, I am curious though about China's involvement
Speaker 1: in this. They obviously have a big say and whether
Speaker 1: this gets sold and potentially who it gets sold to.
Speaker 1: Are you worried at all about but your bid? I'm
Speaker 1: specifically speaking about your potential bid for this company that
Speaker 1: it would satisfy whatever China's looking for. And I don't know.
Speaker 1: Do you know what China's looking for out of this?
Speaker 4: Well?
Speaker 3: I know what China is is for sure clear about
Speaker 3: They're not letting the algorithm go, right. They've said this
Speaker 3: is part of Chinese government property, part of the so
Speaker 3: the IP is something that they have a white knuckle
Speaker 3: grip on and by the way, clear and any buyer
Speaker 3: is not going to get that anyway because the legislation
Speaker 3: won't allow it. So I think the win here for
Speaker 3: China is a buyer coming for that can comply with
Speaker 3: what China has said they're not selling and make a
Speaker 3: deal for what they might be willing to sell. And
Speaker 3: Romayne will know shortly whether or not byte Edance is
Speaker 3: going to change their mind now that they've exhausted their
Speaker 3: legal remedies. And I've said from the beginning that the
Speaker 3: government would win the case, the legislation would be upheld,
Speaker 3: and when that happened, us TikTok would be for sale
Speaker 3: without the algorithm.
Speaker 4: So let's see.
Speaker 3: We now know that the first of those is correct,
Speaker 3: that the Supreme Court has upheld the government's position, and
Speaker 3: will now see if by Dance changes its mind and
Speaker 3: wants to enter into conversations about a deal. Why not
Speaker 3: why not sell it for something rather than get nothing
Speaker 3: and just shut it down.
Speaker 1: So Frank, in terms of trying to put a value
Speaker 1: on this, and I know it's going to take some
Speaker 1: time to hear from those folks before you can put
Speaker 1: a true value. Do you worry at all about potential
Speaker 1: attrition of users that with all this talk about a ban,
Speaker 1: there's been and a lot of anecdotal evidence of users
Speaker 1: power users migrating to other social media platforms and anticipation
Speaker 1: of a ban. Does that worry you at all that
Speaker 1: you might be left with an asset that is just
Speaker 1: seeing too many people flee.
Speaker 4: Absolutely.
Speaker 3: I think it's one of the big risks here, which
Speaker 3: is why we're hoping that the app stays led up.
Speaker 3: And by the way, President Biden and President elect Trump
Speaker 3: have both said they want to see the applet up,
Speaker 3: they don't want to see it banned. The key here
Speaker 3: is in order for that to happen and the ninety
Speaker 3: days to kick in, there needs to be a viable
Speaker 3: buy There needs to be a deal, and for a
Speaker 3: buyer to be viable, they need to have the technology
Speaker 3: stack to move the user base in the data over
Speaker 3: to without relying on the Chinese technology. So it's more
Speaker 3: than your typical business deal. Highest bidder wins. This is
Speaker 3: a complicated transaction and at the heart of it is
Speaker 3: protecting American citizens. Our technology does that, and then putting
Speaker 3: together putting forward a respectable bid for the US TikTok
Speaker 3: assets without the Chinese technology.
Speaker 2: Frank, there is a conversation that circulates that potentially TikTok
Speaker 2: is getting wrapped into trade conversations when it comes to China.
Speaker 2: Have you spoken to anyone in the Trump administration about this?
Speaker 3: Yeah, we have, and you know, Kevin Olaria has joined
Speaker 3: our bid and Kevin went tomorrow lago. We spoke to
Speaker 3: President elect Trump, and President elect Trump encouraged us to
Speaker 3: carry on. And I suspect that this this will be
Speaker 3: a broader conversation that President elect Trump will have with
Speaker 3: President she that said, we're still back to square one
Speaker 3: about how do you buy us TikTok, keep it let up,
Speaker 3: prevent a ban, and comply with the legislation and the
Speaker 3: Supreme Court ruling.
Speaker 4: And so I'm sure they'll be really and dealing going on,
Speaker 4: and there always is.
Speaker 3: But the point is there are some fundamental criteria necessary
Speaker 3: to make the deal. And that's the key, and that's
Speaker 3: where Project Liberty comes in. Because we've been building this
Speaker 3: alternative tech stack for the last five years.
Speaker 4: We're in the right place at the right time.
Speaker 1: Frank, have you been in contact at all with the
Speaker 1: Trump administration or the Trump transition.
Speaker 3: Yes, as I just mentioned. You know, Kevin, who's my
Speaker 3: partner on this, has gone Tomorrow logo with like two
Speaker 3: weekends in a row now to be in touch with
Speaker 3: all of the players there, the President elect himself and also.
Speaker 4: His key team.
Speaker 3: So we're we from the very outset here, wanted to
Speaker 3: make sure that the Biden administration and the incoming Trump administration,
Speaker 3: and of course both President Biden and President Elect Trump
Speaker 3: knew exactly what we're up to it.
Speaker 4: We don't want any surprises here. We want to help.
Speaker 3: We want to be part of the solution to keep
Speaker 3: TikTok lit up, avoid the band, and that's what President
Speaker 3: Biden and President elect Trump want as well.
Speaker 4: So let's make a deal. Let's get this done.
Speaker 1: We have the solution, all right, Well, they're president elect
Speaker 1: has said he needs time to review this. Of course,
Speaker 1: he's inaugurated on Monday. Frank, We're going to catch up
Speaker 1: with you sometime soon in the future once we get
Speaker 1: more clarity on what the potential valuation could be. Frank
Speaker 1: McCourt junior, the founder of Project Liberty and executive chairman
Speaker 1: of McCourt Global, who has said that he would bid
Speaker 1: for those us A TikTok assets along with Kevin O'Leary
Speaker 1: and some other investors, should he be given the chance