President Donald Trump has signed an executive order to approve a deal framework that formally puts American investors led by Oracle in charge of TikTok’s US operations.
The agreement marks an end to a long-running saga over the app’s future in the US market amidst national security concerns – and values the business at about $14 billion.
However, the reported valuation “makes absolutely no sense,” said Jefferies analyst Brent Thill in a CNBC interview today – casting immediate doubt on the financial terms of the highly politicized transaction.
Why $14 billion valuation makes no sense for TikTok US
According to Brent Thill, the reported $14 billion price tag massively undervalues the social media platform’s American assets.
On “Fast Money”, he compared TikTok to peers, including Meta Platforms, that’s currently valued at a whopping $2.0 trillion.
Even Snap Inc, he argued has a market cap of $14 billion as of writing – even though “it’s been a broken record for a while,” referencing the company’s continued struggles with monetization.
Thill speculated that the low valuation could be a strategic move. “They’re getting themselves a good deal, they’re going to mark it up, and it’s going to be a huge windfall.”
Otherwise, the number must be wrong, especially given TikTok’s dominance among Gen Z and its growing influence on consumer behaviour, music, and retail trends, he asserted.
TikTok’s scale and engagement, he argued, far exceed what the reported valuation implies.
For instance, the short-form video app currently has 150 million daily active users (DAUs) in the US alone – a figure that dwarfs Snap’s estimated 10 million DAUs and rivals Instagram’s domestic footprint.
How the Oracle deal will help TikTok in the long run
While the valuation hardly made any sense to Brent Thill – the deal itself, he believes, could prove a turning point for TikTok’s monetisation strategy.
According to him, the resolution of regulatory drama should help attract advertisers. On the CNBC interview, Thill dubbed TikTok one of the few social media platforms with massive room to grow.
The key question, he noted, is whether TikTok can siphon ad dollars from TV and rival social apps – and the answer, he’s convinced, is “yes”.
With rising time spent per session, TikTok is well-positioned to capitalise – provided it can build out robust ad tools and measurement systems to match its scale, the analyst argued.
Thill refrained from speculating on whose market share TikTok will end up stealing in the coming months, though.
What’s next for TikTok?
While Oracle may have scored a strategic win, the valuation on the TikTok US deal continues to raise eyebrows.
Analysts like Brent Thill argue that TikTok’s cultural dominance and user engagement warrant a far higher price tag. The platform’s ability to monetize and capture ad market share will be closely watched in the coming quarters.
For now, the deal offers clarity and operational stability – but whether it unlocks TikTok’s full financial potential remains to be seen.
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