I Lost $70k in One Month – Should I Give Up On FIRE? – Financial …

I Lost $70k in One Month – Should I Give Up On FIRE? – Financial …

Unless you live under a rock, you have likely heard the news: a global pandemic is sweeping the nation, filling up hospital beds and taking down the economy. In fact, if you do live under a rock I would advise you to stay there— come back up when this is over.

We just experienced the longest bull run in history since the 2008 recession. Every year a new financial ‘expert’ prophesied the next market meltdown, but we reached record highs instead. However, it looks like it’s finally time for the market to hunker down as restaurants shut their doors, the travel industry takes a break, and millions of Americans find themselves jobless (a record 3.3 million at the time of writing). 

Note: there may be affiliate links in this post, which means I receive a commission if you click through to these sites at no extra cost to you.

The S&P 500 from February 2007 to the close on March 20, 2020 from Clipping Chains

No one is unaffected by the far-reaching consequences of this pandemic. It has already affected each member of my family. Mr. Mechanic heads to work at the hospital every day, bracing for impact as more people arrive with symptoms from the virus. Meanwhile, my dad filed for unemployment the same week that my sibling booked an emergency flight home from the UK. The health and safety of our loved ones remains top-of-mind as we start socially isolating. Amid all of this, the virus has also infected our economy.

Mechanic’s First Market Crash

I must admit that the scramble of our last recession in 2008 is just a vague memory to me. You have to understand, I’m a 20-something whippersnapper whose recollections of 2008 are mostly by word-of-mouth, recounted like scary stories over a campfire. I was more preoccupied with my calculus exams than Mad Money’s Jim Cramer gesticulating wildly as the DOW marched downward. 

NYT - Front Page (Sept. 30, 2008)I was busy reading textbooks, not newspaper headlines like this one from September 30, 2008.

Now, times are different.  This is the first time I’m experiencing a market crash with some skin in the game. In one month, my net worth dropped by $70k. A couple of days later, I was down another $10k. Media outlets are publishing articles asking if this is the end of the FIRE movement.

Critics wonder if FIRE is just a pipe dream built on the back of a bullish market by people (like me) who haven’t really experienced economic turmoil. With my portfolio bruised and bloody, is this the time for me to tap out? The answer, of course, is no. I’m confident because I have implemented the 4 P’s of Investing: portfolio allocation, preparation, perspective, and self-preservation. (Also the quiet P of privilege, given the fact that I have a stable job, a sizable nest egg, and the money to invest in the first place.)

Portfolio dropping $70k in one month with markers of pandemic timelinesMy investment portfolio dropped $70k in the course of one month.

P #1: Portfolio Allocation: It’s Time To Take Stock

This is the ideal time to take stock (puns always intended) of your portfolio’s allocation and make sure it is still aligned with your long-term goals. My target allocation was 90% stocks and 10% bonds. My retirement date is still far enough in the future to allow for lots of flexibility and more risk. Now the question is: do I feel comfortable with that level of risk, and have I stayed true to my allocation?

My favorite money tracking tool Personal Capital has a sweet portfolio analyzer. However, my old 401(k) has a bunch of funds PC doesn’t recognize, so I haven’t been as careful about staying up-to-date with my allocation.

screenshot of personal capital portfolio analyzerThis portfolio analyzer is more helpful if you don’t have ‘unclassified’ funds

I did the math to get my true portfolio allocation:

We are moving this year, so last year I started saving more cash. I figured it would be best to have a decent emergency fund for unexpected expenses, and also wanted to have the cash available in case we decided to put a downpayment on a property. 

We have since decided not to buy in Santa Barbara, where starter homes range from $800k to a cool $1M. By the time COVID-19 hit, I had about 2 and a half years of expenses saved in my emergency fund. It’s certainly a boon to have this large of a buffer as companies start laying off employees.

I’m a bit of an outlier, though. 65% of millennials ages 18 to 24 can’t cover six months’ worth of living expenses, and 60% of older millennials ages 25 to 34 can’t either. Students who graduate into a recession experience long-term career effects, and generally have lower salaries because they are starting in entry-level positions. This is a terrifying position to be in, and my tips might not be as helpful for someone struggling to get by living paycheck to paycheck. Still, it’s best to start with the basics: make saving an emergency fund a priority no matter what your financial situation looks like.

P #2: Preparation: Stock Market Winter Is Coming

One way to feel calm when markets are volatile is to prepare yourself in advance. Investors know that the market is cyclical: sometimes there are massive stretches of growth, and other times productivity stalls and the markets constrict.

If you understand that recessions are inevitable aspects of our economy, you can plan and be ready when they come. This means saving for an emergency fund in case you are laid off, rack up medical expenses, or have any other unexpected costs pop up. The general advice is to save 6 months to 1 year of expenses, but choose an amount that would get you through an extended period of time without any income. 

Warren Buffett has a saying about the stock market and investing in general:

“Be fearful when others are greedy and greedy when others are fearful.”Click To Tweet

When the markets are doing swimmingly, people take more risks rather than save for a rainy day. On the other hand, when everyone seems to be losing their jobs, that’s when people will feel the need for an emergency fund. Yet if you follow Buffett’s logic, folks should put their paycheck into the market when the economy is at its shakiest. 

When times are good, that’s when its best to save for an emergency fund (the second best time is now!) to prepare for the worst. While many struggled during the 2008 financial crisis, others were able to buy property at rock-bottom prices and be ‘greedy’ because they had prepared beforehand. Be the squirrel stocking up for the stock market winter, so you will be flush with nuts when the blizzards roll in. Brace yourself; a crash will come.

P #3: Perspective: Understanding Your Investments

It is important to have perspective on the long-term pattern of the market. While performance in the past does not guarantee the same in the future, we can take a look at previous bear markets and see how they have been followed by prolonged period of growth.

Chart from Invesco

People claim during every bear market that “it’s different this time!” Yet historically we continually see that the nation overcomes tough times and booms in productivity the following years. Understanding these market patterns with a broader view can help you the next time it feels like money is vanishing from your retirement funds.

Another way to find comfort is to understand what it means when you invest in the first place.

In his book Enough, Jack Bogle explains:

“Investing is all about the long-term ownership of businesses. Business focuses on the gradual accumulation of intrinsic value.”Click To Tweet

When you buy stock, you’re betting that the intrinsic value of businesses will increase. I feel comfortable making that bet because it has always increased in the history of the world. Humans are driven to continuously improve, build, and produce things of value. While it may take time for the numbers to reflect it, over time the stocks will fall into line with the growing value of the businesses you invest in.

Another key word in Bogle’s quote is long-term. Many people try to beat the market by selling their shares when the price is high and buying when they are low again. While this might seem like a simple, smart strategy, all this extra effort rarely pays off. Evidence suggests that buy-and-hold investors actually do better in the long run. That’s great news for those of us who weren’t planning on studying up on market psychology, interest rates, inflation, GDP, and macroeconomics in addition to our day jobs. (And we get to gloat when our investments do better than those managed by people who actually did study those things.)

P #4: Preservation: Don’t Look Now

Even if you carefully curated your portfolio, prepared for bad times, and have the proper perspective on long-term market behavior, it can still be painful to watch your net worth plummet. You would think that after gaining $500 in the stock market, losing $500 would put us back at neutral. However, behavioral economists have found that we tend to feel a loss about twice as severely as we experience a gain.

Person reading flaming newspaperNegative news can make it feel like the world is on fire.

Similarly, our brains have a nasty habit of obsessing over bad news and ignoring the good. This is called negativity bias. Studies have shown that we tend to make decisions based on negative news more than positive. This tends to result in people panic-selling when stocks are declining. Even with all of the logic backing up your investment strategy, emotions can be hard to ignore. There is a simple solution: If the rollercoaster ride makes you feel queasy, don’t look. 

I knew the sirens were sounding a market crash, but I felt confident in my portfolio and my long-term investing horizon. However, because I wanted to avoid negativity bias, I deleted the bookmark on my browser and put it out of my mind until it was time to write this post. When I started writing this article I pulled up my money tracking account on Personal Capital, but before it loaded I prepared myself. I closed my eyes to visualize a couple of possibilities. How would I feel if my portfolio dropped by 30%? What about 50%?

Contemplate how you would feel to see a drop in your net worth.

My net worth peaked a couple of days before the crash at $397k, so let’s round up to $400k. If I lost half, that would be $200k gone in the maw of the market! On the other hand, that would mean I would still have around $200k left, which is a lot of money. It’s more than enough to cushion any disasters, and certainly I would still be able to be happy, find meaning, and continue working with purpose.

More importantly, that loss is called a “paper loss.” The markets could rebound the next day and show no losses at all. The important thing is not to sell when the value is low, that’s called “locking in your losses.” So when Personal Capital shows a drop in $70k, I haven’t actually lost that amount of money unless I sold it! If I can wait to sell until retirement or at least when the economy recovers, the prices of the shares will likely rise to higher peaks.

Next I pictured a more realistic drop of 30%. That would leave me with about $280k, nice! Anything above $200k now would feel like a great gift. When I logged on, I braced for the worst. My net worth showed $318k, or a loss of about $80k since I last looked.

Even though I felt calm looking at that number, in general it’s best to practice self-preservation and don’t look.

A Pandemic and the 4 P’s of Investing: Portfolio Allocation, Preparation, Perspective, and Preservation

We couldn’t have anticipated an outbreak on this scale (oh wait, Bill Gates totally did). However, a market crash is always on the horizon. Even if we can anticipate it, a market crash is usually a symptom of an even bigger disease (in this case a real, literal disease). It can be a huge shock to our personal lives when businesses close, we are laid off, our family-members are drafted into the army, or our health is at risk. COVID-19 is wrecking havoc in serious ways that extend way beyond peoples’ investment portfolios. However, the lesson is the same: we need to do our best to prepare for the worst when times are good.

Financial independence is built on understanding the 4 P’s. They can help investors in times of marked uncertainty to hold steady— a solid investment portfolio built to endure, an emergency fund to prepare for the worst, perspective on previous market cycles, and the will to stop looking at red stock tickers in self-preservation. Make a plan when times are good to be ready to weather the rough waves of a diving market. The 4 P’s will be your life vest when uncertainty goes viral.

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    Coronavirus: Most travel insurers not offering Kiwis cover for virus …

    Coronavirus: Most travel insurers not offering Kiwis cover for virus …

    Planning a trip later this year? Chances are you won’t be covered for any issues relating to coronavirus – even if you’ve paid for insurance.

    A number of New Zealand-based travel insurers, such as Southern Cross, Tower and 1Cover, are not offering cover to travellers for anything related to coronavirus. 

    There have been more than 89,000 cases of the virus worldwide, including one confirmed case in New Zealand. 

    Kiwis headed overseas may not be insured for any issues relating to coronavirus (file photo).


    Kiwis headed overseas may not be insured for any issues relating to coronavirus (file photo).

    With cases in most corners of the globe, and extended travel restrictions affecting China, Iran, South Korea and northern Italy, we look at what insurance companies are doing. 

    Southern Cross Travel Insurance customers who bought their policy before 2pm on Friday, January 31 appear to be covered. 

    However, if you purchased a policy after that date there is no cover for anything relating to coronavirus as it is no longer an “unexpected event”, the insurer said on its website.  

    Similarly, Tower Insurance customers who bought a policy after 5pm on January 24 are not covered for any claims related to coronavirus “under any circumstances”, Tower’s website said.

    IAG - which covers State and AMI insurance companies - is still offering cover for any medical claims linked to COVID-19.


    IAG – which covers State and AMI insurance companies – is still offering cover for any medical claims linked to COVID-19.

    Those who bought a policy before 5pm on January 24 are still not eligible for cover – however, if you are specifically travelling to or are in China’s Hubei province, Tower “may be able to consider your individual circumstances”. 

    Under 1Cover Travel Insurance, any claims related to coronavirus are exempt under its pandemic or epidemic exclusions, the company’s automatic phone recording said.

    However, customers are still entitled to lodge claims for review, which will be assessed on a case-by-case basis, it said.

    Meanwhile, State and AMI – part of IAG Insurance group – are still covering claims for medical events related to coronavirus.

    The only exception to this is for those in or travelling to mainland China on policies booked after February 3, Cover-More New Zealand – which provides insurance to AMI and State – general manager of sales and distribution Will Ashcroft said. 

    This was in line with when the Ministry of Foreign Affairs and Trade changed its advisory on travelling to China, he said. 

    All other State and AMI customers will be covered in the event of hospitalisations and medical evacuations or repatriations due to the virus, Ashcroft said. 

    Given medical costs in a foreign country can run into tens or even hundreds of thousands of dollars, it is “critical” their customers are covered, he said. 

    He is not aware of any insurer currently offering cover for issues involving flights affected by the coronavirus, as the risk is “colossal” and would likely push premiums up. 


    Travel insurance expert and director of Compare Travel Insurance, Natalie Ball said it may be “too late” to buy cover for the coronavirus, but you should invest in travel insurance. 

    The majority of New Zealand travel insurers have exclusions that relate to epidemics, pandemics and the likely threat of an infectious disease, Ball said. 

    Hospital bills in a foreign country can rack up thousands in costs, meaning it is "critical" Kiwis are covered in the event of illness or an emergency, experts say.


    Hospital bills in a foreign country can rack up thousands in costs, meaning it is “critical” Kiwis are covered in the event of illness or an emergency, experts say.

    “Regardless of this exclusion, there is unlikely to be cover for cancellation claims that relate to events known in the mass media, or anything that you were aware of that may give rise to a claim at the time of purchase.”

    Ball said those who had purchased cover well ahead of coronavirus becoming a “known event” may be eligible to claim losses, particularly when affected by travel bans. 

    Although policies vary, people may be entitled for reimbursement should MFAT issue a level-four travel alert – or a ‘do not travel’ warning – affecting your travels. 

    While it may be too late to purchase cover specifically related to the coronavirus, “in an unpredictable world, it’s always smart to purchase travel insurance as soon as you have outlaid for some expenses”. 

    Insurance Council chief executive Tim Grafton agreed – stressing the importance of travel insurance regardless of the level of cover around coronavirus.

    Given the “evolving situation”, Grafton urged people to stay up-to-date with what was happening, check with their insurer for changes and to keep an eye on SafeTravel, the Government’s official advisory site.

    “We strongly advise anyone who is concerned about their insurance cover or looking to amend their travel in response to the outbreak, to contact their travel agent or airline in their first instance or speak with their insurer before they make any changes.”


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    Coronavirus: Most travel insurers not offering Kiwis cover for virus …

    New cluster cases linked to South Korean church | Free Malaysia …

    South Korean soldiers disinfect Daegu after a second cluster of cases linked to a religious group emerged. (AP pic)

    SEOUL: A new coronavirus cluster linked to a South Korean religious group emerged on Monday, with 46 cases at a church near Seoul that defied calls to suspend services.

    The Grace River Church in Seongnam, south of the capital, finally closed its doors on Sunday after nearly a third of its 135 worshippers tested positive – including the pastor and his wife.

    It continued holding services despite repeated government requests for the public to avoid group activities, including religious meetings.

    Forty infections had been newly confirmed among the congregation, Seongnam city authorities said, adding to six previously known.

    More than half of South Korea’s 8,200 Covid-19 cases have been linked to the Shincheonji Church of Jesus, a religious sect often condemned as a cult.

    One of its members attended at least four services in the southern city of Daegu – which became the centre of the country’s epidemic – before being diagnosed.

    South Korea was the first country to report significant coronavirus numbers outside China, where the pandemic first emerged, and remains one of the world’s worst-affected countries despite being overtaken by both Italy and Iran in declared cases.

    Scores of events from K-pop concerts to sports matches have been cancelled or postponed over the contagion, with school and kindergarten breaks extended by three weeks nationwide.

    But recent figures have shown a steep decline in new infections from the beginning of March, raising hopes the outbreak is being brought under control.

    The Korea Centers for Disease Control and Prevention (KCDC) announced 74 new cases on Monday, the second consecutive day the increase has been below 100.

    The death toll remained unchanged at 75.

    Authorities have aggressively carried out diagnostic tests for potential patients, with the total number of tests topping a quarter of a million on Sunday.

    Click here for our live update of the Covid-19 situation in Malaysia.

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    Trump issues order effectively banning TikTok: Everything you need …

    Trump issues order effectively banning TikTok: Everything you need …

    a close up of a sign: TikTok, popular among teens, lets users add music and effects to short videos. Angela Lang/CNET

    © Provided by CNET
    TikTok, popular among teens, lets users add music and effects to short videos. Angela Lang/CNET

    President Donald Trump issued a new executive order regarding TikTok that extends the time its parent company has to sell the US operations of the popular short-video app, after a government panel recommended the action.

    Issued late on Aug. 14, the new order gives ByteDance, the Chinese parent, 90 days to conclude a deal to divest the US arm. It also orders ByteDance to delete any data obtained from US TikTok users.

    The new order doubles the amount of time TikTok initially had been given to find a US buyer after an executive order last week raised the prospect the app would be banned next month. The initial order bars “transactions” with ByteDance, a move that could potentially affect Google’s Play Store and Apple’s App Store, which distribute the software in the US. (A similar order targets WeChat, a messaging app owned by Chinese giant Tencent.) Trump issued the earlier TikTok order under the International Emergency Economic Powers Act, a law that allows the president to regulate international commerce after declaring a national emergency.

    a close up of a sign: TikTok, popular among teens, lets you add music and effects to short videos. 

    © Angela Lang/CNET

    TikTok, popular among teens, lets you add music and effects to short videos. 

    “The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States,” the initial executive order reads. “At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.”

    Trump’s moves come after weeks of high drama involving TikTok. The president has had TikTok in his sights since early July, when he said he would take action against the company in response to China’s handling of the coronavirus pandemic. US Secretary of State Mike Pompeo said earlier that Trump was considering the ban because the app could make US user data accessible to the Chinese government. The administration’s focus then turned to forcing a sale of the app to a US company, and Microsoft  entered into discussions with ByteDance to purchase part of the business. (Microsoft declined to comment on the executive order.)

    TikTok quickly followed up by establishing an information hub to combat misinformation and rumors about its social media platform in real time. TikTok said Monday it will use the hub to “shine a light on the facts and set the record straight.”

    The company had previously blasted the threatened ban, saying it had tried to engage with the government in good faith for nearly a year. TikTok said, however, that the administration “paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses.”

    ByteDance says it remains committed to keeping a TikTok presence in the US. 

    “TikTok is loved by 100 million Americans because it is a home for entertainment, self-expression, and connection,” a company spokeswoman said after the second executive order. “We’re committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come.”

    TikTok is preparing a lawsuit to challenge the original executive order, according to NPR. The lawsuit will argue that Trump’s action is unconstitutional because it didn’t give TikTok the opportunity to respond, NPR said. TikTok declined to comment on the report.

    Separately, TikTok employees are raising funds for a possible lawsuit to challenge the order on the grounds it would deprive them of their livelihoods. The employees have signed up prominent internet lawyer Mike Godwin to represent them. 

    TikTok’s data collection “potentially allow[s] China to track the locations of federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”

    Executive order on TikTok

    Rising concerns about TikTok’s ability to access the personal data of US users come as TikTok sees its popularity explode. The app has gotten a new boost from the COVID-19 pandemic, drawing in people looking to escape the boredom of lockdown. It’s been downloaded more than 2 billion times, according to research firm Sensor Tower, with 623 million downloads during the first half of this year. India had been its largest market, followed by Brazil and the US.

    The US isn’t alone in worrying about the app. India has already banned TikTok, and Australia is also considering blocking it. Trump cited the India ban in his executive order.

    In a move that could smooth things over with some lawmakers, TikTok said on July 22 that it plans to hire 10,000 people in the US over the next three years. The company said it would add roles in engineering, sales, content moderation and customer service in California, New York, Texas, Florida and Tennessee. TikTok has also said that it’s setting up a new data center in Europe and will invest 420 million euros ($500 million) in Ireland.

    Here’s what you need to know about the political backlash against TikTok.

    Why the US might try to ban TikTok



    Why is the Trump administration worried about TikTok?

    TikTok has drawn the attention of the Trump administration, as well as other parts of the government , because of concerns it scoops up information on Americans that could be turned over to the Chinese government. The US Army and Navy have banned service members from downloading the app to government-issued phones . Both the US House of Representatives and the Senate have voted to prohibit the use of TikTok on all government-issued phones. Two senators have also requested that the Department of Justice open an investigation of TikTok, as well as videoconferencing app Zoom. 

    The concern stems in part from the perceived inability of Chinese companies to reject requests from China’s ruling Communist Party to access user data. China critics often cite a 2017 law that requires its companies and citizens to comply with all matters of national security. TikTok says all US user data is stored in the US, with a backup in Singapore. TikTok also says none of its data is subject to Chinese law. 

    The statements didn’t satisfy the Trump administration.

    “TikTok automatically captures vast swaths of information from its users, including internet and other network activity information such as location data and browsing and search histories,” the president’s initial executive order reads. “This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”

    TikTok’s access to US users’ data may well be worth investigating. There’ll always be concerns when apps from foreign companies collect large amounts of user data, said tech policy expert Betsy Cooper, director of the Aspen Policy Hub.

    But, she added, “it’s unclear how much effort the administration will put into actually investigating the seriousness of the specific security concerns with the app versus using this as a threat for broader geopolitical leverage.” 

    Intelligence agencies have determined Chinese authorities could collect data through TikTok, but there is no evidence that they have done so, according to The New York Times. The Wall Street Journal found that the TikTok app for Android surreptiously collected device identifiers known as MAC addresses, though the practice ended in November. (TikTok told The Journal that it’s committed to the privacy and safety of its users.)

    What has TikTok done to address those concerns?

    The company’s blog post following the initial executive order spells out TikTok’s objections. 

    “We have made clear that TikTok has never shared user data with the Chinese government, nor censored content at its request. In fact, we make our moderation guidelines and algorithm source code available in our Transparency Center, which is a level of accountability no peer company has committed to,” TikTok said. “We even expressed our willingness to pursue a full sale of the US business to an American company.”

    TikTok has emphasized its ties to the US and its independence from China. On July 29, TikTok CEO Kevin Mayer, an American, promised more transparency around how the app works, including making its algorithm available to experts. He called on other companies to do the same thing.

    Following comments by Trump on July 31 about a TikTok ban, the company proposed selling the US operations to an American company. That would put the data of TikTok’s US users in the hands of a domestic company. 

    Still, the app’s far-flung creators are clearly nervous about its future. Many are encouraging their followers to migrate with them to other platforms, such as YouTube and Facebook-owned Instagram. Instagram recently launched a new feature, called Reels, designed to compete with TikTok and attract creators. (TikTok hilariously trolled Instagram with a well-timed tweet on the day of the launch.)

    Can the US make ByteDance sell its US operations?

    A government panel called the Committee on Foreign Investment in the United States reviews investments by foreign companies in the US for national security risks. If it sees a red flag, the president can block the deal or ask for changes to it.

    The CFIUS panel was investigating TikTok because ByteDance got its foothold in the US by purchasing Musical.ly in 2017 for $800 million. That business was subsequently rebranded as TikTok and became the sensation that swept up US teens. The CFIUS investigation of TikTok was first reported in November 2019.

    “Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance,” Treasury Secretary Steve Mnuchin, who chairs the panel, said in a statement after the second executive order. “The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.”    

    There’s recent precedent for Chinese companies selling off sections of their businesses. In March, Chinese company Kunlun agreed to sell its controlling stake in gay dating app Grindr after the committee raised national security concerns.

    (If you’re super interested in CFIUS, the law firm Latham & Watkins has a detailed guide available here.)

    What’s the status of a sale of TikTok?

    The situation has changed almost as quickly as videos scroll on the app. Microsoft has acknowledged that it’s pursuing a deal for TikTok’s operations in the US, Australia, Canada and New Zealand. The deal, however, might be larger, according to The Financial Times, which reported the software giant might also be interested in purchasing all of TikTok’s global operations. (TikTok isn’t available in China, where a sister app is used.) A deal could be worth between $10 billion and $30 billion, according to CNBC. The large price range may reflect the different proposed deal structures.

    The initial executive order left open the prospect of Microsoft reaching an agreement, since it didn’t go into effect until September. The follow-on order doubled the amount of time until the deadline for a sale. The president has suggested the US should receive a portion of the transaction price if a deal is struck. It’s unclear whether the government has the authority to request such a payment. 

    Other companies, including AppleTwitter and Oracle, are also reportedly interested, though it’s unclear how seriously they might pursue a deal. Alphabet, Google’s parent company, has also considered purchasing a small stake in TikTok as part of a group bid but that effort has “fizzled,” Bloomberg reported. Alphabet hasn’t ruled out any future bids for the video app. 

    Will Trump’s actions take away TikTok? 

    The government could require Apple and Google to pull TikTok from their app stores. But the companies would likely put up a fight. (Apple and Google didn’t respond to requests for comment on the initial executive order.)

    “The tech community will be very hesitant to go along with this app ban,” said Wayne Lam, an independent technology analyst. “It sets a precedent for the government to ban other apps or even for other global apps to be inaccessible to the US market.”

    Even if the app does disappear from app stores, users can install apps on Android devices without downloading them from the Google Play Store, said Carolina Milanesi, a tech analyst at Creative Strategies. 

    “I don’t know at that point how you police that,” Milanesi said.

    The government also can’t make a specific app illegal for everyday folks to use, said Kurt Opsahl, general counsel at the Electronic Frontier Foundation, an advocacy group.

    “There is no law that would authorize the federal government to ban ordinary Americans from using an app,” he said.

    The US can’t keep the app from working on the internet, which some other countries can do, said Arturo Filasto, a co-founder of the Open Observatory of Network Interference. “There is no central place where you can go to and implement a unified filtering strategy, like there is in places like China and Iran,” Filasto said.

    The government could order all ISPs in the country to block the app, but there’s no guarantee that TikTok wouldn’t find a way to get around those blocking efforts, Filasto said.

    The US Department of State recently unveiled an initiative dubbed  Clean Network that’s designed to protect individual and corporate privacy. The program includes provisions to remove from US stores any apps that “threaten our privacy , proliferate viruses, and spread propaganda and disinformation.”

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