Why Trumps TikTok deal is worrying deep-pocketed investors
Deep-pocketed investors are growing wary of plowing money into the Trump-backed proposal for US ownership of TikTok because of possible massive civil liabilities from a likely flood of lawsuits over the deal, On The Money has learned.Top law firms have alerted several potential investors that they might need some sort of an indemnification from the White House if they play in the proposed Oracle takeover from the Chinese-owned video-sharing app.At issue: Litigation alleging that the deal falls short of legislation, and a subsequent SCOTUS ruling, that some say calls for a deal that amounts to total divestiture from Beijing and big penalties for any violations, according to people with knowledge of the matter.“Our lawyers are worried,” said one Wall Street executive involved in the deal.TikTok’s emergence, mostly with the youth of America, has been haunting Silicon Valley, Wall Street and Washington for more than five years.
Donald Trump, during his first term, sought to ban the app over concerns that it siphons user data and hands it to its owners in Beijing to assist the ruling Chinese Communist Party with spying on the US citizenry.Others worry the company’s addictive algorithm pushed pro-China and anti-American propaganda.TikTok has long denied the charge, but that hasn’t stopped a bipartisan push to remove it from US app stores, culminating in the No TikTok on Government Devices Act.
It was signed into law last year by President Biden, and after a lengthy court battle, upheld by the Supreme Court days before Trump took office.Trump, ever the wild card, then went rogue after the election and said he wanted to preserve TikTok because he believes for all the spying concerns and charges it warps young minds with anti-US propaganda, enough pro-Trump videos surfaced on the app that it helped him win votes in the 18 to 24 crowd that dominates its user base.Upon taking office, he set a 75-day grace period to find a deal, which expires on April 5.As I’ve be...