Analysts Condemn Trump's $14B TikTok Valuation as "Decade's Worst Tech Undervalue"

The Trump administration has finalized a controversial deal to transfer control of TikTok’s U.S. operations to a consortium of American investors, valuing the platform at $14 billion—a figure that has sparked widespread skepticism among analysts and investors. Vice President JD Vance, who cited the valuation during the announcement, framed the transaction as a resolution to years of geopolitical tension over data security concerns tied to TikTok’s Chinese parent company, ByteDance. The deal, approved via an executive order signed by President Donald Trump, mandates that ByteDance’s stake in the new U.S. entity be reduced to less than 20%, with the remaining shares held by investors including Oracle, Silver Lake, and Abu Dhabi-based MGX. Oracle will oversee security operations, retrain the app’s algorithm, and manage user data, while the new board will feature six U.S.-appointed members and one from ByteDance.

The $14 billion valuation has drawn sharp criticism from industry experts, who argue it significantly undervalues TikTok’s U.S. operations. Analysts note that the platform, with 170 million active users in the U.S. and annual revenue exceeding $10 billion, should command a price-to-sales ratio closer to Meta Platforms (10x) or Alphabet (8x), not the 1.4x implied by the proposed deal. Ashwin Binwani of Alpha Binwani Capital described the valuation as “the most undervalued tech acquisition of the decade,” while Jefferies analyst Brent Thill called it “zero sense,” comparing TikTok’s user base and engagement metrics to those of Snap Inc., which trades at a $14 billion market cap despite persistent monetization challenges.

The deal structure includes a licensing agreement for the TikTok algorithm, which Oracle will retrain using U.S. user data. White House officials emphasized that ByteDance will have no access to U.S. user information or control over the algorithm, a claim disputed by some lawmakers who fear lingering influence from Beijing. Republican Rep. John Moolenaar expressed concerns that the licensing arrangement could allow continued collaboration with ByteDance, violating the original law’s stipulations. The new entity will also retain global content access for U.S. users, according to White House Press Secretary Karoline Leavitt, though specifics on how the platform will differ from the current version remain unclear.

Investor reactions have been mixed. While Oracle and Silver Lake are positioned to benefit from the low-ball valuation, ByteDance and its shareholders—including General Atlantic and Sequoia—may view the deal as a strategic misstep. The transaction must be completed by December 16, with the Chinese government yet to formally approve the terms. Analysts also highlighted the political motivations behind the deal, noting that Trump’s decision to extend enforcement deadlines and prioritize American ownership reflects a broader effort to curb Chinese influence in the tech sector.

The long-term implications for TikTok’s U.S. operations remain uncertain. While the deal provides short-term stability, questions persist about its ability to compete with Meta and Alphabet in ad revenue and e-commerce. TikTok Shop’s future, as well as the platform’s role in shaping cultural trends, will depend on its ability to innovate and attract advertisers. Analysts like Thill suggest the resolution of regulatory uncertainty could boost TikTok’s appeal to brands, but the platform’s success will hinge on its capacity to replicate the algorithm’s global reach and maintain user engagement.

Source: [1] Here’s what’s happening right now with the US TikTok deal (https://techcrunch.com/2025/09/26/heres-whats-happening-right-now-with-the-us-tiktok-deal/)

[2] TikTok’s $14 billion price tag in Trump deal stuns investors (https://fortune.com/asia/2025/09/26/tiktok-us-price-tag-bytedance-trump-deal/)

[3] Trump approves TikTok deal through executive order at $14 billion … (https://www.cnbc.com/2025/09/25/trump-approves-tiktok-deal-through-executive-order.html?msockid=175fe54847b566a71aa9f33b467f67a3)

[4] Trump’s TikTok Deal With China: What’s the Valuation? How Is … (https://www.bloomberg.com/news/articles/2025-09-26/trump-s-tiktok-deal-with-china-what-s-the-valuation-how-is-oracle-involved)

[5] Why TikTok US being valued at $14 billion makes ‘zero sense’ (https://invezz.com/news/2025/09/26/why-tiktok-us-being-valued-at-14-billion-makes-zero-sense/)

[6] Trump signs order paving way for TikTok deal to avoid U.S. ban (https://www.cbsnews.com/news/trump-tiktok-deal-oracle-bytedance/)

[7] JD Vance values TikTok the same as Snapchat's parent, and (https://fortune.com/2025/09/26/tiktok-valuation-jd-vance-trump-deal-bytedance-oracle-snapchat-snap/)