ByteDance plans to sell off its stake in TikTok to prevent US backlash

Popular video sharing platform, TikTok has received a massive backlash in the US over security concerns. The issue has reached a point where the US navy has banned app on government-issued smartphones.

Now a Bloomberg (via Engadget) report claims that TikTok’s parent company, ByteDance is considering to cut their losses. According to sources close to Bloomberg, the company is considering selling off a majority stake of TikTok to financial investors, in order to protect the business. This would allow the company to raise funds before having to deal with a potential fallout by the legal issues in the US.

From time to time you may read stories in the media that are not true. Today there is an inaccurate report claiming that ByteDance has considered selling part or all of TikTok.

We went on the record saying it was not true, but they decided to publish it anyway. I want to assure you that we have had no discussions with potential buyers of TikTok, nor do we have any intention to.

– Alex Zhu (via Reuters)

That said, the company is considering the sale as the last resort and is also preparing a legal defence. ByteDance could claim that unlike other apps, TikTok is not collecting sensitive data and hence shouldn’t be a security risk. Speaking to the South China Morning Post, the spokesperson for the company denied reports of the sale. Nevertheless, confidence in ByteDance is low at the moment, especially in the US.