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TikTok fighting for stay of execution amid concerns over delays to deal

The TikTok logo on a smartphone screen
The TikTok logo on a smartphone screen

TikTok is fighting for a stay of execution from US President Donald Trump with the viral music video sharing app expected to file an appeal against a White House ban.

The app, owned by Chinese technology giant Bytedance, is battling a Presidential executive order that will force its parent army to divest the app, or see it banned in the US from September 20.

The company is expected to file a claim in California as soon as on Tuesday, according to US broadcaster NPR, arguing the ban is unconstitutional.

TikTok allows users to share 15 second music videos and has grown to more than 800 million users worldwide. Last week, the President issued a 45 day deadline to get a deal done or see the app banned.

That deadline has left potential buyers racing against time. Microsoft has been in talks to acquire TikTok’s US business, which would allow it to continue operations. Over the weekend, the Wall Street Journal reported social network Twitter had also expressed an interest in a deal.

TikTok, Twitter and Microsoft declined to comment.

A source told the Telegraph the app could be valued upwards $30bn. The source said: “$30bn will likely be the minimum because this company will be bigger than Snapchat this year.” Snapchat is currently worth $31bn.

However, the tight timeline and the complexity of the deal could derail the talks. Reuters reported a carve-out could take as long as a year.

While White House officials only want a sale agreed by their September deadline, it is understood that decoupling the code for a new US version of TikTok's app from its Chinese parent could take months.

TikTok is essentially a clone of Bytedance's Douyin, its Chinese version of the app. TikTok has already moved to separate its management and technology, but should it need to sell its US arm, it would need to further separate the code from the part of TikTok that is still owned by Bytedance.

Despite the drawn-out process, legal experts said President Trump could offer an olive branch to get the deal done.

Jason Hungerford, a regulatory expert at the law firm Mayer Brown, said: “If this becomes a strategic priority… the President will grant what extensions are necessary.”