Seemingly out of the blue, Steve Mnuchin, the former Treasury Secretary, is back in the business spotlight. Recently, he made headlines by saving the struggling New York Community Bank with a $1 billion equity deal. Now, he’s setting his sights on the world of social media, expressing an interest in acquiring the popular app TikTok. The possible extinction of the beloved app has sparked panic among its ardent Gen Z and millennial users, making Mnuchin’s move one to watch closely.
Mnuchin’s return to the business world isn’t surprising given his lengthy career in various sectors, from the Wall Street trading floor to Hollywood. His name appears in the production credits of popular movies like “Avatar” and “The Lego Batman Movie”. However, his interest in acquiring TikTok isn’t a recent development. During his tenure in Trump’s cabinet, Mnuchin urged the then-president to prevent Chinese company ByteDance from acquiring TikTok, which was known as musical.ly at the time.
Mnuchin’s Wall Street Roots and Previous Roles
Mnuchin is a bona fide Wall Street veteran. His father, Robert Mnuchin, was a partner at Goldman Sachs, where he worked for over three decades. Following his graduation from Yale in 1985, Steve joined his father’s company, eventually becoming a partner and Chief Information Officer before leaving Goldman Sachs in 2002. Over the years, he held varied management roles in different sectors, from film production to banking. In 2016, Donald Trump tapped Mnuchin to lead the finance arm of his presidential campaign, later nominating him as Secretary of the Treasury.
As the Treasury Secretary, Mnuchin championed Trump’s tax cuts and supported the rollback of the Dodd-Frank Act. However, his cross-aisle efforts during the Covid-19 crisis will likely be his enduring legacy. Mnuchin worked with Speaker Nancy Pelosi to shepherd a Covid-19 stimulus bill through Congress, allocating nearly $1 trillion in federal aid and temporarily expanding the country’s social safety net.
Post-Public Office Ventures
In 2021, after his tenure as Treasury Secretary, Mnuchin founded Liberty Strategic Capital, a $3.1 billion private equity firm focusing on tech and fintech. The firm’s highest-profile investment came when it provided a $1 billion lifeline to the New York Community Bank. Mnuchin, confident about the deal’s potential for a turnaround, is now eyeing the acquisition of TikTok, a move fraught with geopolitical complications.
The House of Representatives recently passed a bill that would ban TikTok unless ByteDance, its Chinese parent company, sells it. While the bill is not expected to pass the Senate, it has reignited the debate about the risks associated with a Chinese company having access to the data of over 170 million American users. “It should be owned by U.S. businesses. There’s no way that the Chinese would ever let a U.S. company own something like this in China,” Mnuchin argued in a recent CNBC interview.
A Potential Game-Changer
A successful TikTok acquisition could prove to be a major coup for Mnuchin. The app reported annual sales of $16 billion and contributed $24.2 billion to US GDP last year. Furthermore, Bloomberg Intelligence recently valued TikTok’s U.S. business at an estimated $40-50 billion.
However, the acquisition isn’t just about ownership. Experts argue that it would also be necessary to remove all of the app’s data centers and engineering staff from any Chinese oversight, a process that could take a significant amount of time. “Mnuchin and his group, if they had the money, and they were able to buy [TikTok], and separate not only ownership but the technology—that would obviously, to me at least, be a very positive development,” said Michael H. Posner, an NYU Business professor and former Obama Assistant Secretary of State.
With such high stakes, Mnuchin’s potential TikTok acquisition is a business move that will undoubtedly continue to make waves.
