TikTok Nears A Deal
TikTok continued to dominate the news yesterday as each passing day gets closer to the November 12th deadline placed on its parent ByteDance by the Trump administration to sell its U.S. operations.
It all started when the Financial Times broke the news early yesterday that TikTok CEO Kevin Mayer was quitting less than six months into the job. TikTok's general manager Vanessa Pappas will fill the CEO role on an interim basis until a replacement can be found.
"In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for. Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company," Mayer told employees. "I understand that the role that I signed up for — including running TikTok globally — will look very different as a result of the U.S. administration's action to push for a sell off of the U.S. business."
News then broke that a sale of TikTok's U.S., Canadian, Australian and New Zealand operations for between $20 billion to $30 billion could come in the next few days. Mayer was reportedly set to announce his resignation with the announcement of a sale next week but was prompted to announce it yesterday when the email leaked.
As for the suitors, Microsoft and Oracle remained the likely candidates. Oracle reportedly offered a bid of $20 billion split evenly between cash and stock, with an agreement to give 50% of TikTok's profit to ByteDance. The source added that Treasury Secretary Steven Mnuchin "likes the Oracle deal."
News then broke that Walmart, which most likely wasn't on most people's radar, would team up with Microsoft in a bid to acquire TikTok. Shares of Walmart surged more than 4% on the news.
"The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets," a Walmart spokesperson said. "We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators."
While Walmart is an unusual candidate to acquire a company like TikTok, it may make sense as Walmart continues to fight Amazon in e-commerce. Walmart is also likely keeping an eye on the progress Facebook is making in becoming a more dominant e-commerce company.
With a deal for TikTok imminent, it will be interesting to see who ends up the winning bidder and if it turns out to be worth the lofty price tag in the years to come.
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