Market Overview

For TikTok, Analyst Says 'Writing Is On The Wall,' Sale Imminent

For TikTok, Analyst Says 'Writing Is On The Wall,' Sale Imminent

The bids for TikTok are in, and ByteDance seems to have realized that "the writing is on the wall," meaning that a sale may be the only option with an executive order looming from U.S. President Donald Trump, according to Wedbush.

The TikTok Sale Analyst: Daniel Ives said Microsoft Corporation (NASDAQ: MSFT) and Walmart Inc (NYSE: WMT) have a 90% probability of winning the deal.

The TikTok Sale Takeaways: Although deal negotiations are likely to complex, given several technology and data privacy issues to be addressed, Microsoft seems to be the “only true white knight around,” Ives said in a Friday note. (See his track record here.)

The FAANG tech giants — Facebook, Inc. (NASDAQ: FB),, Inc. (NASDAQ: AMZN), Apple Inc. (ASDAQ: AAPL), Netflix Inc (NASDAQ: NFLX) and Google parent Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) — are caught up with regulatory concerns, the analyst said.  

Microsoft, and not Oracle Corporation (NYSE: ORCL), seems to be the only U.S. tech stalwart “with the treasure chest, infrastructure, and distribution to get a deal like this done,” given the complex politics involved and the high price tag, he said. 

Microsoft’s decision to purchase TikTok is a good one, as its valuation could grow from the current $35-$40 billion to almost $200 billion in a few years “if navigated the right way,” Ives said. 

Walmart entered Microsoft’s bid late, but is the "missing piece in the puzzle," given TikTok’s potential ecommerce and advertising capabilities, the analyst said. This could cement Microsoft’s victory in the acquisition process, he said. 

Related Links: 

TikTok CEO Kevin Mayer Quits, Says US Push For A Sale Drove Decision

TikTok Sale Looks Imminent As Microsoft Teams With Walmart, Oracle Finalizes Bid

Latest Ratings for MSFT

Oct 2020Piper SandlerMaintainsOverweight
Oct 2020BarclaysMaintainsOverweight
Oct 2020StifelMaintainsBuy

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