Fox Business reports that "President Trump said he has agreed in concept to a deal under which Chinese-owned video-sharing app TikTok will partner with Oracle Corp. and Walmart Inc. to become a U.S.-based company, capping negotiations that have stirred debate over national security and the future of the internet."
Together, according to reports, Oracle and Walmart will own 20 percent of TikTok; Oracle would own 12.5 percent, and Walmart would own 7.5 percent.
Fox Business writes that "TikTok’s current owner, Beijing-based ByteDance Ltd., would retain roughly 80% ownership of the company, according to people familiar with the situation. But because ByteDance is about 40% owned by U.S. investors, the new company with equity stakes for Oracle and Walmart can be described as having majority American ownership, they said.":
However, this construct may run into trouble with the Trump administration, which was prepared to ban all new TikTok downloads as of today, and ban the company from doing business in the US, over concerns about data usage and security concerns. The Trump administration implied that its blessing of the deal was predicated on the fact that "it will have nothing to do with China," which does not seem to be the case.
At the same time, Business Insider reports that the Trump administration was saying that "the companies involved in the deal had agreed to pay a $5 billion fee to the US Treasury which would be used to set up an education fund." However, "ByteDance said the $5 billion figure was not a one-off fee but an estimate of the income tax the company could potentially pay over several years. 'TikTok is confident in its future but the actual tax amount will have to be determined in accordance with the actual state of the business and American tax structures'."
- KC's View:
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There will be much posturing and rhetoric about this deal, I suspect, as it moves forward during the crazy election season. All that seems clear to me is this - Walmart has played this very well, keeping itself in the deal as it keeps its eyes on the prize, which is all those young people who it will have access to through some third-party marketplace.
