Given the craziness of the past few months in terms of politics and economics, it's easy to forgive the confusion and anticipation of the TikTok deal. To recap, TikTok is the fastest-growing social network in the world and is especially popular among teenagers and young adults. The app's popularity accelerated during the pandemic.
There were also credible accusations that the app wasn't doing a good job of protecting user data, and the company was influenced by the Chinese government. It culminated with President Donald Trump ordering ByteDance to either sell TikTok or shut down operations. There was an agreement in principle that TikTok would be sold to Oracle (Nasdaq: ORCL).
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However, there was considerable skepticism around the deal as there was no enforcement mechanism. Further, the company was being sold to an ally of the Trump administration. Additionally, there were no specifics on how the data would be protected.
Following the deal, there was a little update on any progress. Now, it seems that both sides have quietly scrapped the deal as Trump's departure means there is no threat hanging over Bytedance.
Another reason for the deal's dissolution is that federal courts blocked the Trump administration order banning TikTok from operating in the US. In a court filing, TikTok and the Justice Department put the lawsuit on hold so the Biden administration could undertake a review and decide if the attempted ban was still warranted.
At a White House press conference, Press Secretary Jen Psaki said, "I will note, broadly speaking, that we are comprehensively evaluating ... the risks to U.S. data" from TikTok and other potential threats.
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Naturally, this news has brought back chatter that TikTok may be looking to file an IPO. Its Chinese rival, Kuaishaou recently filed an IPO in which the company was able to raise $5.4 billion and attain a valuation of $160 billion. However, Bytedance denied these reports that it was interested in an IPO.
Assuming that the Biden administration doesn't force a sale, then an IPO seems likely at some point. And, TikTok could fetch a valuation in the $250 billion range given its size, engagement, and growth rate.