Former Barclays boss Bob Diamond wants to take over TikTok as chairman of a social media start-up that says it is worth more than $3 billion, despite revenue last year of just $36 million and the cash balance was less than $1 million.
The financier’s new direction comes after video platform Triller agreed to a full takeover by AGBA, a small, US-listed financial services platform based in Hong Kong with a controversial past. Diamond, who has chaired AGBA since September, will serve in the same role in the combined company.
AGBA shares have risen more than 400 percent since the deal was announced on April 18. In a press release and presentation about the deal, AGBA said that Los Angeles-based Triller had been independently valued at $3.2 billion and that the combined group would be valued at $4 billion.” on a pro forma basis”. Triller shareholders will own 80 percent of the shares.
But based on AGBA’s stock price of 40 cents before news of the deal broke, the 407 million shares the company will issue suggests that Triller has agreed to be acquired for $163 million. The Los Angeles-based group reported revenue of just $36 million and a loss of $131 million in the nine months through September. AGBA reported a net loss of $49 million at the end of December on revenue of $54 million and cash on hand of $1.8 million.
Triller’s push is a departure for Diamond, who once commanded a bank with a trillion-dollar balance sheet. He resigned from Barclays in 2012 following the Libor interest rate manipulation scandal and has kept a relatively low profile since then.
Triller is a controversial – and tiny – player in the music industry. The startup announced investments from a number of famous artists in 2019, including Snoop Dogg, The Weeknd, Lil Wayne and Kendrick Lamar. Then CEO Mike Lu made the bold claim that this “represents perhaps the most significant change in music since the dawn of streaming.”
The company has sought to capitalize on the backlash against TikTok over its Chinese ownership, with Lu’s successor Mahi de Silva calling on every American to delete TikTok in 2022. Triller is now led by Bobby Sarnevesht.
But Triller has been accused of trying to inflate its users and has been sued by the world’s largest music companies – Universal and Sony – for failing to pay royalties owed to them. At the end of September, Triller owed $24 million to music companies but had just $967,000 in cash, according to a regulatory filing in January in which the company said it had raised $420 million.
Since leaving Barclays, Diamond has focused primarily on financial services trading. At the beginning of the year he merged the British medium-sized broker Panmure Gordon with a competitor. Panmure is held by Atlas Merchant Capital, its investment vehicle.
Diamond declined to comment on AGBA’s merger with Triller.
Atlas was an advisor to AGBA for $83,000 a month – the same amount Diamond receives as chairman of the financial services platform.
Wing-Fai-Ng, chairman of loss-making AGBA and incoming chief executive of the combined group, told the Financial Times he had known Diamond for more than a decade and considered him “like family”.
The Triller deal was announced days before President Joe Biden signed an initiative that will ban dominant video app TikTok from U.S. app stores unless its Chinese parent company divests the company.
AGBA, originally a special purpose acquisition company founded by a Hong Kong company and based in the British Virgin Islands, has agreed to relocate to the United States as a condition of the merger.
“We believe there is a tremendous opportunity in social media and video sharing coming to market in the United States in the next year or so, and we believe Triller is by far the historically positioned company is that benefits from it,” said Ng. a former investment banker, said the FT.
Triller was called “a disruptive force at the intersection of technology, entertainment and commerce, leveraging advanced AI” in an AGBA investor presentation explaining the deal, saying the platform has more than 450 million consumer accounts.
Triller declined to discuss its current investors.
AGBA’s majority owner is controlled by Taiwanese businessman Richard Tsai, whose family founded the Fubon financial empire. According to regulatory filings, Tsai also has a stake in Triller.
AGBA got its current form after it merged with troubled Convoy Global after the Hong Kong investment adviser was forced to delist from the city’s stock exchange after failing to file accounts on time.
His troubles stemmed from his role at the center of a scandal in the city in 2017 dubbed the “Enigma network,” which revealed a web of tightly controlled cross-shareholdings in listed companies in the region. Several former Convoy executives were jailed for fraud in 2021.
The new company began trading in the United States in November 2022.