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TikTok To Operate As A US Company Worldwide, With ByteDance As Majority Stakeholder: FT

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TikTok To Operate As A US Company Worldwide, With ByteDance As Majority Stakeholder: FT

ByteDance-owned short-form video app TikTok will operate as a standalone company based in the United States encompassing its entire global operations, where Oracle Corporation (NYSE: ORCL) would hold a minority stake, the Financial Times reported Tuesday.

What Happened: Oracle will also have a stake in TikTok globally, not just the U.S. operations, while ByteDance will be the majority stakeholder, according to FT.

Walmart Inc (NYSE: WMT), which had partnered with Microsoft Corporation (NASDAQ: MSFT), in its efforts to bid for TikTok would also potentially own a minority stake along with the California-based enterprise software giant, people with the knowledge of the matter told FT.

The emergent company is reportedly likely to have independent oversight and be managed separately from ByteDance.

The Chinese parent of TikTok will retain control of the all-important algorithm that drives millions of teenagers to the app, according to FT.

Why It Matters: The proposal adheres to the recommendations made by the Committee on Foreign Investment, an interagency committee that reviews certain foreign investments, before President Donald Trump signed an executive that targeted TikTok, FT noted.

In August, Trump had threatened to ban the short-form video app unless its parent agreed to sell it.

The order had claimed that apps such as TikTok and Tencent Holding Ltd’s (OTC: TCEHY) WeChat collected data in such a way that it compromises U.S. national security.

On Tuesday, Trump said that his administration would decide on the proposal “pretty soon,” adding that he had “high respect” for Oracle Chairman Larry Ellison, the Wall Street Journal reported.

It is likely the deal would be evaluated by senior national security officials, who are Senate-confirmed or above in status, Aimen Mir, a former Treasury official, told the Journal. 

Price Action: Oracle shares closed nearly 2.5% higher at $60.49 on Tuesday and gained almost 1% in the after-hours session.

 

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