China won't support a TikTok deal

By: Miguel A. Rodriguez

17:33, 23 September 2020

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TikTok deal with Walmart and Oracle in jeopardy due to the US-China tensions

At the end of last week, we discussed a potential IPO that is said to happen in 2021; new information came from China.

According to the English version of the official newspaper of the Chinese Communist Party – China Daily – the mainland has no valid reason to approve a deal that, from its point of view, is "dirty," "unfair," and based on "bullying and extortion" and will not allow Oracle and Walmart to acquire #TikTok.

Moreover, the US is threatened by the app's success, and to turn the tables, it uses "national security issues" to ban the video-sharing app. This statement followed one released at the beginning of the week by Global Times in which was said that China wouldn't approve the deal.

To make the deal even harder to complete, Beijing has modified a set of rules that restrict a specific AI-technology sale to foreign buyers. However, ByteDance stated that it would establish a US subsidiary.

From now on, what one can do is wait and see how things will further develop, as the September 20 deadline set by Trump Administration for TikTok to be bought passed, and Oracle and Walmart haven't yet reached a viable partnership with TikTok. 

The news was a hard pill to swallow for Oracle, as during today's pre-market session, it lost more than 1.60%. On the other hand, Walmart gained 0.28%.

Read about TikTok's potential IPO here!

Sources: techcrunch.co, finance.yahoo.com, reuters.com


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This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided.