Twitter willing to buy TikTok; but shortage of fund

After Microsoft, Twitter willing to buy TikTok; but shortage of fund. Who gives more? The intention of Microsoft to buy TikTok will now joins the supposed interest of Twitter. Sources close to the negotiations indicate in Reuters that the company has already held conversations with ByteDance -owner of TikTok- to reach a potential agreement to buy the part of the social network that operates in the United States.

This hypothetical operation has a fundamental problem for Twitter: money . This social network has a capitalization of about 30,000 million dollars, which is more or less the amount that would have to be paid for that acquisition.

Twitter is short of cash

Twitter willing to buy TikTok; but shortage of fund. Analysts polled in Reuters do not appear to be overly confident in Twitter’s ability to outbid Microsoft’s offer for TikTok. The Redmond company also expressed its intention to buy TikTok’s divisions in several English-speaking countries, but a later report spoke of acquiring the entire company .

Donald Trump has given ByteDance 45 days to close the purchase deal with Microsoft, but it seems that Twitter wants to bid also despite its financial situation, with much less room for maneuver than Microsoft’s.
Erik Gordon, a professor at the University of Michigan, explained that “Twitter will have a hard time raising enough funding to even acquire TikTok’s US operations. It doesn’t have enough lending capacity .”

TikTok
TikTok App

Not only is there that problem: shareholders might want you to focus on your current business, but one of those big shareholders, Silver Lake, seems interested in supporting this bid. Sources close to the negotiations also indicate that on Twitter they are making another argument in favor of the operation: since they have no activity in China, the pressure from the Government of that country could be relieved when reaching an agreement.

Source | Reuters

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