American technology giant Twitter reportedly had talks about an acquisition deal with Chinese video-sharing app TikTok. The Wall Street Journal reported that it remains to be seen whether Twitter would move ahead with its plan to acquire TikTok as it seems that any such deal would face serious obstacles.
The biggest challenge to any acquistion deal involving TikTok is the executive order passed by Trump administration from August 6, which bans TikTok parent company ByteDance from handling transactions in the US. The order, which has been strongly opposed by China, takes effect within 45 days. Notably, US President Donald Trump considers TikTok a potential security threat but the US government has failed to produce any evidence to prove that ByteDance or TikTok has ever shared the data of Americans with the Chinese government. TikTok has also opposed Trump's decision and is likely to challenge the Trump administration’s order.
It may be recalled that few days ago Microsoft had announced that it was in talks with ByteDance for a possible acquisition. The WSJ report claimed that Microsoft is without doubt the front runner in this deal and Twitter should be seen as a long-shot in a bid for TikTok. Twitter is much smaller than Microsoft and it is highly unlikely that Twitter would be able to pay as much as as the software giant.
On August 2, Microsoft had said that its CEO Satya Nadella had spoken to President Trump about a possible TikTok acquisition, which would include TikTok operations in the US, Australia, Canada, and New Zealand. Microsoft is planning to wrap the talks by September 15th.