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Summary
- TikTok intends to go public on the United States stock exchange in about a year.
- The IPO remains subject to a Trump deal, easing the White House’s concerns about the threat to national security from the app.
- Oracle Corp, the renowned Silicon Valley tech mogul, is aiming to be a technology partner for video application for its $ 20 billion US operations.
- Reports suggest that the spun off company, called TikTok Global, may have a majority of US directors on its board, a US-based CEO.
- TikTok is on the hunt for a new CEO; reportedly in a conversation with Instagram co-founder Kevin Systrom.
TikTok has become the hottest point of disagreement between the world’s largest economies, the United States and China, which have battled for trade, security and tech dominance amid a dispute over the growth virus.
The popular short video app, especially popular with Gen Z and millennials, intends to go public on an American stock market in about a year. The stock market consensus is of the opinion that a TikTok IPO will be one of the largest stock market debuts in the technology sector.
But the real question is whether ByteDance, the owner of TikTok, can get approval from the White House to avoid the US ban. Additionally, TikTok has not had a CEO since the end of August 2020. The White House decision is scheduled for September 20.
ALSO READ: Oracle watches TikTok operations as it becomes a separate entity
ByteDance competes for a deal with the White House
China’s ByteDance is planning an initial public offering of TikTok Global in the US. This remains subject to approval of ByteDance’s proposed agreement with the US government, which seeks to ensure the data security of US TikTok users. .
Reports suggest that the White House and ByteDance have agreed on a term sheet on some aspects of a deal. President Donald Trump’s approval is still pending.
The Treasury Department, which is leading the TikTok deal for national security purposes, has provided few revisions to its proposal to ByteDance. Some of these belong to queries such as:
- How will TikTok data and source code be protected?
- How will the data and source code of the application be handled?
- What are the technical details of the deal?
What remains a topic of debate for a few and concern for others is the fact that there is no certainty as to whether President Trump will approve the deal. Also, there is no clarity as of now on what assets TikTok Global would own beyond its assets in the US.
Meanwhile, the Trump administration is still scrutinizing the details of the deal to make sure it meets national security thresholds.
GOOD READ: Are the Tides Against Chinese Tech Companies?
Trump Administration and ByteDance Clash
TikTok is currently facing the threat of being banned in the US Consequently, its IPO has turned into geopolitical football, kicked off by the Trump administration, which believes the app poses a serious threat to national security.
President Trump has threatened that there could be a TikTok ban next week.
Last month, President Trump ordered ByteDance to divest TikTok. Their rationale was that through the widely used app, the personal data of roughly 100 million Americans (who use TikTok) could be passed on to the Communist Party of China government, a serious threat to America’s national security.
ALSO READ: China Internet Play: Problems, Censorship and ByteDance in Action
Chinese officials don’t want ByteDance to say yes to a forced sale. Consequently, the Company’s proposal to the White House called for it to retain majority ownership of TikTok. In reaction to this, President Trump has opposed indications that ByteDance may retain majority ownership of TikTok.
TikTok property under the scanner
The precise ownership structure of TikTok under the proposed settlement remains unclear. The Trump Administration suggests that under its proposal, ByteDance cannot retain a majority stake in TikTok.
Meanwhile, Oracle Corp, the American multinational technology giant intends to become a technology partner for TikTok. Additionally, Oracle may have an ownership interest in the application, but not own it. Another major investor in TikTok could be Walmart.
GOOD OBSERVATION: Oracle beats Microsoft in the US TikTok deal race.
Will new CEO be appointed soon?
While the TikTok-Trump deal gathers momentum, the video-sharing app has approached Instagram co-founder Kevin Systrom for the CEO role, following the departure of Kevin Mayer. However, reports suggest that talks with Kevin Systrom are in the preliminary stages.
Kevin Systrom launched Instagram in 2010 with Mike Krieger. The power duo sold the app to Facebook in 2012 for $ 1 billion. Kevin Systrom remained the CEO of the platform until September 2018.
It should be noted that TikTok has not had a CEO since the end of August 2020, when Kevin Mayer resigned after only three months on the job. Reports suggest his concern was President Trump’s threat to ban the app in the United States. TikTok US CEO Vanessa Pappas is currently its global leader.
The complex dispute over what happens alongside TikTok continues, although related parties appear to be getting closer to negotiate a tough deal.
GOOD READ: The Ongoing Dispute Between the United States and China: A Look at Recent Developments
