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Before now, Walmart wanted to be sole owner of TikTok U.S., and also partnered with SoftBank and Alphabet for the acquisition.Walmart Inc (NYSE: WMT) has partnered with Microsoft Corporation (NASDAQ: MSFT) in a bid to own the U.S. operations of TikTok. The partnership comes after an initial and failed Walmart attempt to make the TikTok acquisition in partnership with Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and SoftBank Group Corporation (OTCMKTS: SFTBY).Before now, the Trump administration accused the Chinese-owned video sharing app TikTok of threatening the U.S. national security. BBC News reported that TikTok has now been given 90 days to sell its U.S. operations to an American company. Also, the Trump administration warned TikTok that failure to do so will get the app banned in the
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Before now, Walmart wanted to be sole owner of TikTok U.S., and also partnered with SoftBank and Alphabet for the acquisition.
Walmart Inc (NYSE: WMT) has partnered with Microsoft Corporation (NASDAQ: MSFT) in a bid to own the U.S. operations of TikTok. The partnership comes after an initial and failed Walmart attempt to make the TikTok acquisition in partnership with Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and SoftBank Group Corporation (OTCMKTS: SFTBY).
Before now, the Trump administration accused the Chinese-owned video sharing app TikTok of threatening the U.S. national security. BBC News reported that TikTok has now been given 90 days to sell its U.S. operations to an American company. Also, the Trump administration warned TikTok that failure to do so will get the app banned in the country.
Walmart Plans to Own TikTok in U.S.
According to a CNBC report, Walmart confirmed its new partnership with Microsoft on Thursday:
“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 third-party marketplace and advertising businesses.”
In addition, Walmart is confident that the partnership would satisfy the needs of both TikTok users and the U.S. government.
As a result of the partnership announcement, Walmart shares reached a 52-week high of $139.35 on the same day. At the close, Walmart’s market capitalization nearly hit $387 billion.
Initially, Walmart was in a consortium with SoftBank chief operating officer Marcelo Claure as lead. The report revealed that the association included Google parent company, Alphabet, and sought to buy TikTok’s U.S. arm.
According to sources, Claure hoped that Walmart’s American image and Google’s cloud computing framework would give SoftBank access to the video-sharing app. However, the Walmart-Alphabet deal fell apart last week as Alphabet could face an antitrust allegation if it buys TikTok’s U.S. arm.
Some unidentified sources spoke with CNBC on what SoftBank aimed to achieve with the consortium. In recent years, the Japanese multinational company has specialized in acquiring growing technology companies. Examples are Uber Technologies Inc (NYSE: UBER) and WeWork, as SoftBank has majority shares in both high-flying companies.
Walmart and Others
Although Walmart wanted the majority of TikTok, one of the sources said that the U.S. government wanted a technology company to be the lead investor. Consequently, another source has added the Walmart-Microsoft deal will be a profitable one. Considering Microsoft’s large market value and Walmart’s wide user base, the source said that the partnership will generate both political and financial advantages. At the moment, Microsoft boasts of $1.67 trillion in market capitalization.
Apart from the Walmart-Microsoft bid, there is also a rival offer from Oracle Corporation (NYSE: ORCL). Trusted sources revealed that the deal is worth between $20 billion and $30 billion of TikTok’s U.S. operations. As of Thursday when the CNBC report was released, TikTok had 48 hours to choose one of the offers.
The managing director and technology analyst at Wedbush Securities Daniel Ives commented on Walmart’s plan to acquire TikTok’s U.S. business. Describing the move as “a huge shot in the arm”, he added:
“…but Walmart could use this as a golden opportunity to partner with Microsoft and monetize the TikTok base, which could start to rival Instagram in the next few years just given its global presence.”
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.