TikTok US Ban: Mr. Wonderful Tries To Buy App With Crowdfunding Effort

Posted: May 31, 2024

Kevin O’Leary, the Canadian entrepreneur and Shark Tank star, has launched a crowdfunding effort to buy TikTok. O’Leary aims to raise between $20 billion and $30 billion to acquire the social media platform, which is facing a potential U.S. ban or forced sale due to national security concerns regarding its Chinese parent company, ByteDance. The potential TikTok US ban has spurred various stakeholders to consider acquiring the platform to keep it operational in the United States.

O’Leary first mentioned his plan to buy TikTok during a Fox News interview in March. Now, he’s pushing forward with the idea, claiming it could prevent the platform from being banned. His initiative is called “Mr Wonderful’s Plan to Buy TikTok” and is designed to “democratize the whole platform” and ensure U.S. control over its user data. This effort could potentially establish a TikTok US sale, securing the platform’s future amidst legislative uncertainties.

This isn’t the first crowdfunding bid for TikTok. Earlier this month, former L.A. Dodgers owner Frank McCourt and former Activision CEO Bobby Kotick also expressed interest in launching similar efforts. Meanwhile, TikTok is suing the government to overturn the ban-or-sale law, arguing against the legislative action that targets its operations. The looming TikTok ban has intensified these legal and financial maneuvers.

O’Leary’s plan involves using StartEngine, a crowdfunding platform that allows people to invest in startups and early-stage companies. On his Instagram, O’Leary linked to wondertiktok.com, directing users to StartEngine, where they can “reserve” their interest in investing in TikTok. The page highlights TikTok’s impressive user base and revenue, describing it as the “fifth-biggest platform on the planet.” However, it’s currently not accepting payments, merely gauging interest. The potential TikTok sale price has become a focal point, with estimates suggesting it could be in the tens of billions.

O’Leary’s public persona and business acumen make his plan noteworthy. He’s a well-known figure from Shark Tank and has a track record of running successful businesses. His social media presence could help garner support for his crowdfunding campaign. With Mr. Wonderful’s net worth being substantial, his financial influence and reputation could play a critical role in the success of this initiative.

However, as Business Insider points out, this effort may not be accessible to everyone. Due to U.S. “qualified investor” regulations, the crowdfunding might be limited to those earning over $200,000 annually or having specific financial qualifications. This creates a scenario where O’Leary’s plan appears to cater more to wealthy individuals rather than the general public, despite his intentions to “democratize” TikTok. The TikTok US sale would thus primarily involve affluent investors.

One significant aspect missing from O’Leary’s bid is the fate of TikTok’s algorithm. The algorithm is crucial to the platform’s success, driving its recommendation engine and user engagement. Chinese authorities have stated their opposition to selling TikTok, particularly its algorithm, to foreign entities. It remains unclear how O’Leary plans to address this issue, but he hints at developing a new U.S.-centric algorithm to replace the original. This uncertainty adds a layer of complexity to the potential TikTok sale price and overall feasibility of the acquisition.