More pieces are coming together for a TikTok sale but questions linger.
Will this potential deal for Oracle and Walmart to pay $12 billion to buy 20% of TikTok set a precedent for other deals such as WeChat and other apps caught in the crosshairs?
Is Trump getting what he wants with this deal or will he now rescind his initial OK?
Wasn't he originally looking for outright ownership?
Will China approve the deal?
The convoluted deal would set up a separate entity, TikTok Global, with Oracle owning 12.5%, Walmart at 7.5% and China's Bytedance at 80%. Headquarters could be in Texas; TikTok's US ops are currently in LA.
Notably, US VCs have 40% ownership of TikTok parent Bytedance. How will that stake impact the overall control of TikTok Global, if at all? Investors in Bytedance are Sequoia Capital China, SIG Asia, Coatue and General Atlantic.
Winners and Losers
Oracle wins since its cloud computing business gains a big customer. Walmart wins as an e-commerce provider to TikTok.
Bytedance wins since it keeps majority ownership and holds onto its algorithm that spins out content.
Consumers could lose since TikTok might still be blocked. Will a new algorithm work as well? Also, Walmart merchandise sales may clutter TikTok.
Facebook is a big loser. It should have beat TikTok in the first place.
Great Firewall
The US has long criticized China of its Great Firewall. Now the US is introducing its own firewall, shielding US consumers from Chinese apps. If a WeChat ban goes through, VPN sales are likely to take off in the US.
