On Saturday, within few hours of US Department of Commerce announcing the ban on TikTok that would prevent users to download TikTok apps from Apple AppStore or Google Play, US President Donald Trump gave his blessings to TikTok Oracle deal. With the announcement, almost everyone thought that the TikTok saga in the US has ended, finally.
Looks like the climax is yet to be written.
If the ownership claim on TikTok Group – the new holding company that would control TikTok in the US and many other countries – is not confusing enough, China’s stand on the TikTok Oracle deal is only making the whole celebration mere a puppet show.
And now, the latest move by TikTok is making a mockery of the whole situation.
On Wednesday TikTok followed the path of WeChat, and filed preliminary injection to avoid the ban that would be imposed on TikTok from coming Sunday. The move is being seen as surprise action by TikTok that could have a negative impact on the ongoing negotiation between Trump’s administration and ByteDance owned TikTok.
TikTok has accused the Trump administration of taking action for political gains in the upcoming election instead of genuine security concerns.
TikTok is seeking a hearing before the imposed ban that is scheduled to come into effect from Sunday 27th.
TikTok Oracle Deal: Confusion And Contradiction
Since the day ByteDance owned TikTok has announced the partnership with Oracle and Walmart, various contradicting statements from all the parties involved have left media and partnership wondering about the agreed restructuring agreement.
ByteDance has claimed that it will retain 80% of TikTok and transfer 20% to Oracle and Walmart, the ‘trusted technology partner’ and ‘commercial partner’, respectively. Contradicting the claim, Oracle has stated that after creating the new holding company TikTok Global, a majority of shares would be owned by Americans investors and American company, and ByteDance will have no ownership in it.
Currently, 40% of ByteDance, the holding company of TikTok, is owned by the US investors including Sequoia Capital and General Atlantic. After the restructuring of TikTok, the US investors will be entitled to own 40% of TikTok Global and 40% of ByteDance which will continue to own and operate China-centric apps Douyin, – a short video social service targeting the Chinese market, Toutiao, and others.
Besides, as per the partnership agreement, Oracle will own 12.5% of TikTok Global while Walmart will control 7.5%.
Altogether the US-based companies and investors will have 60% of TikTok Global, leaving minority share of 40% for ByteDance and other Chinese stakeholders.
This leads us to a head-scratching question, if ByteDance claims to own 80% of TikTok, how come the Americans have a cushion big enough to claim 60% of the same company?
The constant contradicting statements coming from all the parties involved have left experts, media and many others wondering about the real action and game plan agreed between the parties. At one side Donald Trump approves the deal, on the other side his own administration imposes the ban. And now, TikTok, which is yet to get approval from China, is apparently rubbing the Trump administration on the wrong side by challenging them in court.
The ambiguity among all the future partners has started killing the excitement and raising doubts about the whole agreement.
What exactly is cooking between ByteDance, Oracle and Walmart is anybody’s guess now. But what we can clearly make out from all the development that unfolded in the last few days is that either the announcement of TikTok Oracle deal is a last-minute decision taken in hush-hush to meet the deadline set by Trump, or it’s just an eyewash to get TikTok back in the game in the US before Facebook Reels eats into the market developed and dominated by TikTok so far.
What’re your views on this do let us know in the comment section below.