Courtesy of ZeroHedge
Update (1845ET): Right on schedule, the latest anonymously sourced report has arrived to inform the world that the Microsoft-Wal-Mart deal group is in the lead, since its bid values TikTok at $30 billion, $10 billion more than Oracle's bid of cash and stock.* * *Update (1450ET): More than an hour has passed without any new TikTok suitors being announced? What a surprise.
Of course, the notion that Wal-Mart is going after TikTok seems especially bizarre when one considers that the retailer is supposedly in the process of selling off business lines to focus on the "core business". On Thursday afternoon, the company announced plans to sell off two more non-core brands, Shoes.com and Bare Necessities, Bloomberg reported.
* * *
Update (1230ET): The FT is reporting that Microsoft and Wal-Mart have officially joined forces in their bid for TikTok.
The biggest brick-and-mortar retailer in the US said in a statement that its partnership with Microsoft makes buying the social media breakout star a reasonable proposal.
"We believe a potential relationship with TikTok US 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," Walmart said in statement. "We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators."
Meanwhile, ByteDance’s founder and chief executive Zhang Yiming told WSJ and others that he is "moving quickly to find a resolution ot the issues that we face globally, particularly in the US and India" amid rumors that he is being sidelined in the deal talks. This all comes from a lengthy WSJ profile of the founder/CEO, which also recounts how Zhang first established a relationship with Microsoft, a relationship that eventually evolved into the ongoing talks to buy the company.
With SoftBank now out of the picture, the other known bidders have been reduced to Oracle, and a group of US investors led by VC firms General Atlantic and Sequoia. Oracle is already reportedly preparing a $20 billion cash and stock bid, which looks a little low relative to other reported valuations that have put TikTok's US-focused business (along with its business in Australia, Canada and New Zealand) closer to $26 billion, or even $30 billion.
$WMT's decision to partner with Microsoft shows it doesn't want to be distracted from its core business, said analyst Neil Saunders, managing director of the GlobalData Retail consultancy. “As large and competent as it is, Walmart is not primarily in the technology business…This is one reason why a potential partnership with Microsoft makes good sense."
Still, the two companies seem like a fairly odd couple. And with two other strong bidders in the race, and the startup founder's unenthusiastic remarks about the prospects for a deal, it's possible this saga isn't anywhere close to over, despite reports that the first bids could be announced by the end of the week.
Almost two weeks ago, Trump ordered ByteDance to sell the US operations within 90 days, or face being barred from operating in the US, similar to how the app is barred in India.
We'd rather not delve into speculating about TikTok's operations, or its incipient ability to squeeze revenue out of its vast user base, but as the FT noted in a column earlier this month, it's extremely possible that whoever buys TikTok, Facebook – with Instagram already ripping off TikTok's most popular features – might emerge the real winner.
* * *
Update (1150ET): Fox Business' Charlie Gasparino now reporting that the fight over TikTok has come down to Microsoft's tech vs. Oracle's political connections.
Headlines are hitting at least every hour now as the dealmaking enters its final, frenzied stages.
* * *
Update (1045ET): According to the scuttlebutt shared on CBC earlier, TikTok CEO Kevin Mayer decided to step aside after being cut out of buyout talks involving Microsoft. At least that's one version of the story.
There's been some other TikTok deal-related news Thursday morning, with Oracle reportedly readying a $20 billion cash and stock bid.
- ORACLE SUBMITS BID FOR TIKTOK IN $20B STOCK AND CASH DEAL: WRAP
In its latest report citing multiple anonymous sources close to the deal talks, CNBC laid out the current landscape of the deal. It looks like ByteDance has settled on selling, but the company is counting on a fierce bidding war that satisfies Beijing's demands that the optics not make it look like a "smash & grab" theft of a business.
According to CNBC, Mayer was originally going to announce his decision to step down along with the sale agreement next week, but he decided to push up the announcement after somebody apparently leaked it to the press. Mayer joined TikTok earlier this year after running Disney’s streaming video operations, and had only been in charge of the business for 3 months. Apparently, he wasn't as effective at quieting regulators' concerns as the company had probably hoped when it hired him.
Vanessa Pappas, the head of TikTok’s US business, will now take over TikTok. ByteDance still hasn’t decided on a buyer for the hot social media app, and it's still discussing bids from Oracle, Microsoft and a third US company believed to be Wal-Mart, which is reportedly putting together a bid with SoftBank, a Japanese telecoms conglomerate/VC firm that is adept at cutting massive checks for ownership stakes in hot tech startups. Another, unknown, bidder is also reportedly working on a bid.
Although Walmart has been working with SoftBank, because that offer doesn’t include a cloud technology backbone component, it is likely a nonstarter, according to CNBC's sources.
Spokespeople for TikTok and SoftBank declined to comment to CNBC, while the financial news network's reporters weren't able to reach anybody from WalMart's comms team.
News of Oracle's bid for the social media startup prompted a string of jokes from the twitter peanut gallery.
* * *
Hours after TikTok's American CEO quit the company due to the increasingly untenable geopolitical pressure, the financial press is reporting that a deal for Microsoft to buy TikTok's US business could be announced in the next 48 hours.
Mayer resigned earlier amid reports that Oracle and Microsoft were both pursuing a deal, while Google parent Alphabet affirmed that it was not considering an offer for TikTok.
Now, it appears Microsoft has managed to convince TikTok's management that a tie-up with one of the world's biggest and most storied tech firms would carry fewer risks and be more lucrative than a deal with Oracle.
Trump has signed two executive orders targeting TikTok and seeking to bar its use in the US if Chinese parent ByteDance doesn't agree to sell the US business to an American company.
- TIKTOK SALE TO MICROSOFT COULD COME IN THE NEXT 48 HOURS: CNBC
It all sounds vaguely contradictory: why would Mayer quit if a deal was within his grasp? We feel like now would be a good time to remind readers to take all of this deal speculation with a grain of salt.