TikTok parent ByteDance to keep 50% of profits after Trump-brokered sale of US division: report

TikTok’s Chinese parent company is poised to keep roughly half the profits from the app’s US business — even after ceding majority ownership to US investors under a deal pushed by President Trump, according to a report.People familiar with the talks told Bloomberg News that ByteDance would pocket both a licensing fee for TikTok’s prized algorithm and a profit share tied to its remaining equity stake in the US venture.That would likely leave ByteDance with a total of 50% or more of TikTok US earnings once the sale is completed, according to Bloomberg News.The arrangement may help explain the Trump team’s floated $14 billion valuation for the US unit — a number that fell sorely short of analyst estimates of $35 billion to $40 billion.Ashwin Binwani, founder of Alpha Binwani Capital, told Bloomberg News that the proposal “could be the most undervalued tech acquisition of the decade,” arguing the figure reflects just a third of TikTok’s true worth.Under the draft plan, TikTok US would pay ByteDance a fee equal to about 20% of revenue generated through its recommendation algorithm.Sign up to receive On The Money by Charlie Gasparino in your inbox every Thursday.

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Never miss a story.At $20 billion in sales, for example, that would amount to $4 billion for ByteDance, according to one source.The Beijing-based company would also retain about 20% of profits on the remaining revenue through its ownership stake.The US-backed buying group is expected to include Oracle Corp., Silver Lake Management and Abu Dhabi-based MGX, alongside existing investors.Collectively, they would hold about 80% of TikTok US.The deal remains unresolved despite Trump’s insistence that he struck an understanding with Chinese President Xi Jinping during a call last week.Chinese officials have not publicly confirmed any agreement, and the ...