Billionaire investor Mark Cuban has sounded a warning to fellow ‘Shark Tank’ star Kevin O’Leary regarding his plan to acquire TikTok’s U.S. operations, citing significant risks and challenges.
A Risky Plan to Rebuild TikTok
Mark Cuban is leaving no room for doubt when it comes to Kevin O’Leary’s plan to buy TikTok’s U.S. operations. The billionaire investor and “Shark Tank” star took to X to critique the bid, calling it a long shot and warning O’Leary about the risks involved.
Cuban’s message to him is to think twice before diving into this deal, especially without a clear path to success. He doubts that O’Leary will succeed in rebuilding TikTok from scratch, highlighting several major obstacles:
The Challenges Facing O’Leary’s Plan
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Ad revenue isn’t what it used to be: Cuban argued that O’Leary’s plan to rely on advertising revenue to sustain TikTok’s U.S. operations isn’t realistic in today’s market.
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User retention will be tough: Keeping users engaged without the original TikTok algorithm will be a significant challenge, especially with other platforms eager to poach its audience.
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ByteDance likely won’t sell: Cuban doubts ByteDance would agree to sell TikTok, calling it a $300 billion asset that wouldn’t be off-loaded for a fraction of its value.
- Competitors are ready to pounce: With every major platform eyeing TikTok’s users, rebuilding from scratch will be an uphill battle.
A Stark Warning
Cuban ended his thread with a stark warning: “When you sit at the negotiating table, you always look for the sucker. If you don’t see one…”. This suggests that O’Leary may be taking on too much risk and could potentially lose out in the deal.
The bid comes at a critical time, as the Supreme Court is set to review a U.S. law that could ban TikTok starting Jan. 19, 2025, unless it’s sold. However, ByteDance has repeatedly said it’s not interested in selling TikTok – and experts are also questioning whether the platform can survive without its famous algorithm, which is excluded from any potential sale due to Chinese export controls.
O’Leary’s Response
Despite Cuban’s concerns, O’Leary and his partner Frank McCourt insist they don’t need the original TikTok algorithm to succeed. They’ve proposed creating a new algorithm to power the platform, with backing from Guggenheim Securities and prominent technologists like Tim Berners-Lee, the inventor of the World Wide Web.
However, Cuban’s warnings are a stark reminder that rebuilding a social media platform from scratch is no easy task, especially in today’s competitive market.
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