Comment on ByteDance prefers TikTok shutdown in US if legal options fail, sources say

• UnderpantsWeevil@lemmy.world ⁨6⁩ ⁨months⁩ ago

  Why would the forced sale of a product have an impact on the value?

  I have ten cupcakes. They each cost me $1 to make. I would like to generate a 20% profit, so I sell them for $1.20/ea.

  Then the government passes the “UnderpantsWeevil Can’t Sell Cupcakes In the US Act of 2024”, effective in one minute. A financial tycoon from American Cupcake Corp comes by my shop and says “I’ll pay you $.10 for those cupcakes, which will be worthless to you in the next 59 seconds.” He intended to buy them from me and sell them at his store, across the street, for $1.30/ea.

  He’s not under any time constraint, but I am. So if I can’t move the balance of my cupcakes in a minute, they become worthless to me.

  Logically, I should sell any cupcakes I can’t move off the shelf in a minute to American Cupcake Corp.

  If anything, the fact that it’s being forced to “sell” should make the existing social media companies froth at the mouth.

  Why would any social media company bid the real value of the property when the real value falls to zero in nine months?

  And - let us assume, hypothetically, that these American tech companies have a history of operating as a cartel - why would they not coordinate their bids to guarantee the smallest possible auction price?

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  • Car@lemmy.dbzer0.com ⁨6⁩ ⁨months⁩ ago

    I’m not an economist but that makes sense to me.

    What about a modified scenario:

    A small island has three cupcake makers operating out of their homes: Meta, Alphabet, and Bytedance. Each has captured a section of the island’s market with cupcakes and at this point, there’s no real opportunity for growth. Meta can’t convince Bytedance’s customers to switch because they prefer other flavors. Meta would need to purchase one of the other cupcake companies in order to expand.

    None of the cupcake makers are interested in selling their companies. They consider themselves elite and their successes feed into the CEO and shareholder perceptions of value and success.

    Now, we consider that one of the cupcake companies is funded by a rich uncle from a different country. The island’s elders decide that the uncle’s influence is too great and orders Bytedance to sell its cupcake company or leave the island.

    We’ve established earlier that people who like Bytedance cupcakes don’t necessarily want to eat Meta or Alphabet cupcakes, so if they leave the market, those customers may be gone for good. They may have a change of heart and decide that cupcakes of any flavor are fine, but they may also be angry that the government forced their favorite place out of business. In any case, Meta and Alphabet cannot rely capturing this segment of the market to grow.

    Faced with the dilemma of possibly gaining customers organically or definitely gaining customers by purchasing their preferred product brand, I’d argue that the remaining companies may jump on the opportunity to purchase Bytedance before they are forced out. None of the cupcake companies were up for sale in a traditional sense before, so this was never a realistic path to achieve growth.

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  • Zink@programming.dev ⁨6⁩ ⁨months⁩ ago

    Why would any social media company bid the real value of the property when the real value falls to zero in nine months?

    I could see Google buying the brand even without the secret algorithm, and now the next app update will start showing YouTube Shorts. Or maybe they would just start showing “tiktoks” in the YouTube app, with no mention of yt shorts.

    Meta seems like a possible choice too. Hell, maybe Elon Musk will waste billions of dollars ruining it and throwing away an extremely popular brand.

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    • UnderpantsWeevil@lemmy.world ⁨6⁩ ⁨months⁩ ago

      I could see Google buying the brand even without the secret algorithm

      Not at the company’s pre-law market cap

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  • TheLowestStone@lemmy.world ⁨6⁩ ⁨months⁩ ago

    He’s not under any time constraint

    Remind me not to eat at your house.

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