Source: PaxForex Premium Analytics Portal, Fundamental Insight
Twitter has negotiated with the extremely popular short video sharing application TikTok and its Chinese parent company ByteDance about a potential merger, The Wall Street Journal reported. The merger will affect application users in the U.S., Canada, Australia, and New Zealand. It is not clear whether the negotiations have progressed beyond the preliminary stage.
TikTok has over 100 million users in the U.S. who are attracted by the convenience of video creation and the intuitive recommendation engine. This combination could be a turning point for Twitter. The company continues to focus on its short messages but is struggling to achieve steady revenue growth from its massive user base.
Besides, earlier this month, a tech giant Microsoft confirmed that it is negotiating the acquisition of TikTok, which is a hit among teenagers and celebrities. The application often boasts dance number clips and lip synchronization, which become viral.
With a market capitalization of just $29 billion, Twitter will face a big obstacle in trying to finance such a deal, as TikTok was recently estimated at $60 billion.
The Chinese authorities' demand that companies within their borders "cooperate" with government security services has raised concerns about personal data collected from the USA users of the application.
After President Donald Trump has continually raised the issue of national security over the past few months, he gave TikTok permission until September 15 to find a buyer or face a USA ban. Over the weekend, Trump issued an executive order prohibiting any company in the United States from engaging in any transactions with TikTok or its parent company.