The $14 billion price tag proposed for TikTok’s U.S. business values it more like a stuffy old energy or food company than a leading global social media company.
The rough estimate, cited by Vice President JD Vance on Thursday, is well below previous projections that scaled closer to $40 billion. Vance’s comments came as President Donald Trump pushed forward a plan for American investors to buy the U.S. operation from Chinese internet firm ByteDance Ltd.
Vance conceded that the purchasers will “ultimately” determine the amount paid. While expected buyers, including Oracle Corp. and Silver Lake Management LLC, would likely welcome a low-ball valuation, ByteDance and its existing investors may find it amusing, if not insulting.
Ashwin Binwani, founder of Alpha Binwani Capital, said the proposal “could be the most undervalued tech acquisition of the decade.” He estimated the floated figure reflects a third of TikTok’s true value. “By every major financial metric and peer comparison, this price tag looks dramatically misaligned with reality.”
TikTok’s video-sharing platform ranks among the most popular U.S. social media properties based on average daily app usage. Its influence has also been felt in the proliferation of competing short-video services like Instagram Reels and YouTube Shorts.
Valuing it has always been difficult, particularly given the complexity of the app’s coveted content algorithm. But even by the most conservative estimates, the U.S. operation—the firm’s most lucrative market with 170 million active users—generates revenue north of $10 billion a year.
So at that $14 billion valuation, TikTok U.S. would carry a price-to-sales ratio of roughly 1.4 times, in line with mature, low-growth companies like Exxon Mobil Corp. and General Mills Inc. By way of comparison, Instagram operator Meta Platforms Inc. trades at around 10 times sales while YouTube parent Alphabet Inc. is at 8 times.
“The suggested value looks like daylight robbery,” said Vey-Sern Ling, senior equity adviser for Asia technology at Union Bancaire Privee.
The deal, which must be completed within 120 days, would spin out TikTok U.S. into a new joint venture where ByteDance’s stake would be reduced to less than 20% to satisfy U.S. national security concerns. While Trump said his Chinese counterpart Xi Jinping has given his blessing, Beijing has yet to say publicly whether it has granted approval.
“It’s like you’re putting a gun to ByteDance and saying ‘sell or you stop,’” said Alvin Foo, a venture partner at Zero2Launch. Much remains uncertain, including who will run and operate the service, given none of the proposed buyers are internet or consumer-facing companies. “Right now, it’s really Trump making the call, without listening or discussing with the Chinese government on whether the sale will go through.”