Investing.com -- Wedbush analysts expect the Trump administration to delay the imminent TikTok ban, despite an anticipated Supreme Court ruling upholding the prohibition.
The ban is set to take effect on January 19th, one day before President Trump’s inauguration.
“While TikTok, ByteDance, and 170 million active US users are getting ready for the ban...we ultimately believe this ban will be delayed by the Trump Administration looking at a myriad of executive actions that will postpone the ban by up to 90 days until a sale/partnership/technology resolution can be reached with ByteDance,” said Wedbush
The Trump administration is exploring several options, with a 90-day delay being the most probable, analysts noted.
One possible scenario involves Elon Musk playing a significant role in finding a solution for TikTok, either through a consortium to purchase the app or a partnership.
"Given the strong and growing alliance between Trump and Musk this is not a total shock route as behind the scenes the Trump White House is looking at alternatives if the Supreme Court upholds the ban (very likely) over the next 24 hours. In addition, Beijing/Xi Jinping has a strong relationship with Musk so there would be added comfort in this deal/potential partnership to avoid a TikTok ban in our view," adds Wedbush.
The firm also highlights that an outright sale of TikTok’s U.S. operations would likely exclude its algorithm, a key asset ByteDance is unwilling to part with. A sale without the algorithm could be valued between $40 billion to $50 billion. Alternatively, a joint partnership, potentially led by Musk, could avoid a complete ban.
The analysts also emphasized the diplomatic implications of the ban, warning of potential ripple effects with Beijing. They suggest that Trump’s decision to delay the ban could smooth future tariff negotiations with China.