The Trump administration estimates that TikTok’s U.S. business is worth $14 billion, which is a number that shocked investors because it’s much lower than previous projections of around $40 billion, according to Bloomberg. This figure, mentioned by Vice President JD Vance, comes as President Donald Trump pushes for American investors, including tech giant Oracle (ORCL) and investment firm Silver Lake, to buy TikTok’s U.S. operations from China-based ByteDance. Many see the proposed price as a potential steal for the buyers, while ByteDance and its backers may view it as an insult.
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Indeed, Ashwin Binwani, founder of Alpha Binwani Capital, who doesn’t own shares in ByteDance, said that the $14 billion estimate might be the “most undervalued tech acquisition of the decade.” He believes that TikTok’s U.S. business is worth at least three times that amount. Even conservative estimates suggest that the U.S. arm, which has 170 million active users and brings in over $10 billion in revenue per year, should be valued much higher.
In fact, at $14 billion, TikTok’s price-to-sales ratio is similar to that of low-growth companies like Exxon Mobil (XOM) and General Mills (GIS) at only about 1.4x. In contrast, Meta Platforms (META), which owns Instagram, trades at about 10x sales, while YouTube’s parent Alphabet (GOOGL) trades around 8x. Nevertheless, the proposed deal would turn TikTok U.S. into a new joint venture where ByteDance holds less than 20%. And although Trump said that Chinese President Xi Jinping supports the deal, China has not publicly confirmed this.
Is ORCL Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 25 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $337.62 per share implies 19.1% upside potential.
