Snippet – Maths doesn’t matter, given Trump’s demand China has no involvement in the new TikTok.
Finally, after months of dispute and interrogation, Trump vs. TikTok has now settled down. President Donal Trump gave the deadline of September 15. If TikTok fails to hand over the algorithm by then, it will be banned even in the USA. But seems like everything finally concluded.
The Sale Saga Of TikTok Finally Concludes
President Trump approved the deal and put an end to the TikTok sale which was going around for over a month. The agreement would allow Oracle Corp. and Walmart Inc. to buy a minority stake in a new joint entity, called TikTok Global. Regarding this Trump said, “I have given the deal my blessing”.
But the harmony of the deal didn’t last for a very long time. Beijing based parent company ByteDance announced that it will retain 80% share over the company. This announcement came a day after Donal Trump said ” no Chinese involvement”. But Oracle put forth a contrasting statement. It said that ByteDance would eventually relinquish its shares. In a statement to the Wall Street Journal, Oracle Executive Vice President Ken Glueck said that once TikTok Global is created, “Americans will be the majority [shareholders] and ByteDance will have no ownership.”
Meanwhile, analysts said, “It’s rare for the parties involved in a major deal to disagree so radically on its contours”. The key reason behind such disparity is the eventual distribution of TikTok’s shares. A statistics by both Oracle and Walmart says that America will control more than 50% of TikTok.
But citizens of the US already control a big chunk of ByteDance itself. People are not new to this matter have said that American investors already control 40% of the giant. That means they will in theory own 40% of ByteDance’s TikTok stake, too. Combined with Oracle and Walmart’s 20%, that brings U.S. investor control to more than half.
The statement of ByteDance makes it clear that the company is not inclined to relinquish its right to American investors. If ByteDance does remain the largest shareholder, depending on how the deal is structured, the company could have voting rights conferring greater decision-making authority than is granted to TikTok’s minority shareholders. If ByteDance does remain the largest shareholder, depending on the deal. Then the company could have voting rights conferring greater decision-making authority.
The exact math may not even matter. Dan Ives (Wedbush security analyst) says that a 50% US ownership stake is important for Trump’s government. But Dan also believes that ByteDance will not step out of the picture entirely.