President Trump’s much touted TikTok deal may very well be facing a last-minute hitch – and it has to do with billionaires, taxes and China hawks in Congress, On The Money has learned.
Billionaire Jeff Yass – a significant Trump backer within the 2024 election who heads the large investment firm Susquehanna partners – is amongst those that could face the wrath of Congress or a significant US tax levy in the event that they are forced to sell their current stakes in TikTok’s Beijing-based owner, ByteDance, so as to buy right into a latest, US-controlled TikTok, in keeping with insiders.
So are Bill Ford of General Atlantic Partners and personal equity powerhouse KKR. All were big investors in ByteDance and so they have been planning to “roll” their shares into the brand new US-controlled company to avoid hefty capital gains taxes.
Susquehanna is claimed to carry a 15% stake in ByteDance and General Atlantic is seen holding an equally large position. KKR’s stake is around 1.7%.
The query is whether or not a roll-over comports with the present law demanding that the US majority controls TikTok. A minimum of on paper, the Chinese shares could find yourself as many of the equity in the brand new company whenever you throw within the 19.9% stake promised to the mainland that shall be held by ByteDance.
The White House, for its part, believes the deal comports with the law. “There isn’t a way the law prevents US investors from controlling the brand new company using their Chinese shares,” one White House insider told me. “They’re US investors, Under the law that doesn’t constitute further Chinese ownership that has to stop at 19.9%.”
Others involved within the deal aren’t so sure. Congressional concerns are mounting that the deal still violates laws designed to ban TikTok if it’s not totally divorced from China.
“If these guys who hold ByteDance stock want in, they’re probably going to must sell,” one prospective equity investor told On The Money. “If this thing looks prefer it’s going to be majority owned and even near it by the Chinese, Congress goes to go nuts.”
“I just don’t see how they sell an organization that’s controlled using mostly ByteDance stock as equity,” the equity investor added.
A rep for General Atlantic had no comment. Reps for Susquehanna and KKR had no immediate comment.
China hawks in Congress have said in recent days that they may rigorously review the “framework” for a US-led TikTok that President Trump announced earlier this week. Many want TikTok shut down because along with spying, they consider it serves up filth to users within the US who’re mostly young adults and youngsters.
Yass, Ford and the people at KKR could, after all, keep their ByteDance shares and make a brand new investment within the US company said to be price roughly $50 billion to appease Congress.
One other possible solution is that they don’t sell all their shares and roll some into the brand new company, which might mean the ByteDance shares could comprise as much as 49% of the equity, which could satisfy China hawks and their concerns over ownership.
Or they might roll over their Chinese shares and let President Trump argue the deal passes legal muster.
As reported by On The Money this week, China President Xi Jinping has agreed to permit US tech giant Oracle control and rewrite the app’s all-important algorithm, the key sauce that curates videos based on user preferences, but which lawmakers claim is utilized by the Chinese to spy on US users. Oracle can also be a possible top investor in the brand new company.
That algorithm issue was considered a significant hurdle in getting a deal – until the possible ByteDance share issue emerged on Tuesday.
President Trump’s much touted TikTok deal may very well be facing a last-minute hitch – and it has to do with billionaires, taxes and China hawks in Congress, On The Money has learned.
Billionaire Jeff Yass – a significant Trump backer within the 2024 election who heads the large investment firm Susquehanna partners – is amongst those that could face the wrath of Congress or a significant US tax levy in the event that they are forced to sell their current stakes in TikTok’s Beijing-based owner, ByteDance, so as to buy right into a latest, US-controlled TikTok, in keeping with insiders.
So are Bill Ford of General Atlantic Partners and personal equity powerhouse KKR. All were big investors in ByteDance and so they have been planning to “roll” their shares into the brand new US-controlled company to avoid hefty capital gains taxes.
Susquehanna is claimed to carry a 15% stake in ByteDance and General Atlantic is seen holding an equally large position. KKR’s stake is around 1.7%.
The query is whether or not a roll-over comports with the present law demanding that the US majority controls TikTok. A minimum of on paper, the Chinese shares could find yourself as many of the equity in the brand new company whenever you throw within the 19.9% stake promised to the mainland that shall be held by ByteDance.
The White House, for its part, believes the deal comports with the law. “There isn’t a way the law prevents US investors from controlling the brand new company using their Chinese shares,” one White House insider told me. “They’re US investors, Under the law that doesn’t constitute further Chinese ownership that has to stop at 19.9%.”
Others involved within the deal aren’t so sure. Congressional concerns are mounting that the deal still violates laws designed to ban TikTok if it’s not totally divorced from China.
“If these guys who hold ByteDance stock want in, they’re probably going to must sell,” one prospective equity investor told On The Money. “If this thing looks prefer it’s going to be majority owned and even near it by the Chinese, Congress goes to go nuts.”
“I just don’t see how they sell an organization that’s controlled using mostly ByteDance stock as equity,” the equity investor added.
A rep for General Atlantic had no comment. Reps for Susquehanna and KKR had no immediate comment.
China hawks in Congress have said in recent days that they may rigorously review the “framework” for a US-led TikTok that President Trump announced earlier this week. Many want TikTok shut down because along with spying, they consider it serves up filth to users within the US who’re mostly young adults and youngsters.
Yass, Ford and the people at KKR could, after all, keep their ByteDance shares and make a brand new investment within the US company said to be price roughly $50 billion to appease Congress.
One other possible solution is that they don’t sell all their shares and roll some into the brand new company, which might mean the ByteDance shares could comprise as much as 49% of the equity, which could satisfy China hawks and their concerns over ownership.
Or they might roll over their Chinese shares and let President Trump argue the deal passes legal muster.
As reported by On The Money this week, China President Xi Jinping has agreed to permit US tech giant Oracle control and rewrite the app’s all-important algorithm, the key sauce that curates videos based on user preferences, but which lawmakers claim is utilized by the Chinese to spy on US users. Oracle can also be a possible top investor in the brand new company.
That algorithm issue was considered a significant hurdle in getting a deal – until the possible ByteDance share issue emerged on Tuesday.
