The U.S. government valued TikTok's U.S. business at $14 billion, a figure that was far lower than previous market expectations and surprised investors. Many investors believe that such a price is undoubtedly a "leave out" for potential buyers, including Larry Ellison's Oracle Corporation and its partner Silver Lake Management Company.

Vice President J.D. Vance cited the rough valuation on Thursday, noting that earlier valuations of TikTok's U.S. operations had been as high as $40 billion. Vance's remarks coincided with President Trump pushing a plan for American investors to acquire TikTok's U.S. operations from Chinese Internet company ByteDance.

Vance acknowledged that the final purchase price will be determined by the buyer. While potential buyers may be happy with the low valuation, ByteDance and existing investors may find the offer amusing or even insulting.

Alpha Binwani Capital founder Ashwin Binwani (who does not hold ByteDance shares) said that this acquisition "may become the most undervalued technology acquisition in a decade." He believes that the transaction price is only one-third of TikTok's true value. "Whether looking at major financial indicators or industry comparisons, this price is seriously out of touch with reality."

As one of the most popular video sharing platforms in the United States, TikTok has a very high average daily user activity. Its influence has also promoted the popularity of competing short video services such as Instagram Reels and YouTube Shorts. TikTok’s valuation has been difficult to pin down, especially given the complexity of its popular content recommendation algorithm. But even according to the most conservative estimates, the U.S. market is the company's most profitable segment, with 170 million active users and annual revenue of more than $10 billion.

At a $14 billion valuation, TikTok's U.S. business trades at a price-to-sales ratio of only about 1.4 times, which is at the same level as mature, slow-growing companies such as Exxon Mobil and General Mills. For comparison, the market-to-sales ratio of the Instagram parent company Meta platform is about 10 times, and the price-to-sales ratio of YouTube parent company Alphabet is 8 times.

"This pricing is simply a steal," said Ling Vey-Sern, Asia technology senior equity adviser from Union Private Bank.

According to the transaction plan, the acquisition must be completed within 120 days. TikTok America will establish a new joint venture, and ByteDance’s shareholding ratio will be reduced to no more than 20% to meet U.S. national security requirements. While Trump said Chinese President Xi Jinping had agreed to the deal, Beijing has yet to say publicly whether it has approved it.

“It’s like holding ByteDance at gunpoint to sell or go out of business,” said Alvin Foo, a venture partner at Zero2Launch. There are still many uncertainties, including who will operate and manage the new service, and many potential buyers are not Internet or consumer-facing companies. "The current situation is that Trump made the decision without consulting or communicating with the Chinese government. It is still unknown whether the transaction will be completed."

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