Sources confirmed on Monday that ByteDance had picked Oracle Corporation (NYSE: ORCL) over Microsoft as a partner to save the U.S. arm of its Chinese video-sharing social networking service, TikTok, amidst the rising tensions between the two largest economies of the world.
Oracle’s stock remained flat in premarket trading on Monday. Shares of the company are currently exchanging hands at £44.20 per share. In comparison, Oracle had tumbled to £31 per share in March when Coronavirus weighed on global businesses. At the start of the year, the U.S. company had a per-share price of £42 per share. Interested in investing in the stock market online? Here’s a simple guide to get you started.
President Donald Trump threatened to ban TikTok in the U.S.
ByteDance struck a deal with the American multinational computer technology corporation that is structured not as an outright sale but as a partnership. Oracle published its earnings report for the fiscal first quarter last week that came in stronger than Wall Street expectations.
TikTok’s Chinese owner has been in search of a potential buyer to offload the U.S. arm of the video-sharing service after President Donald Trump threatened a countrywide ban on TikTok if it wasn’t sold to a U.S.-based entity.
According to TikTok, it has over 100 million users in the United States. The White House had previously expressed concerns that the app could be used to transfer user data to China’s communist government, that made it a national security risk. TikTok has reiterated on several occasions that it doesn’t engage in such activities at all.
Sources also confirmed that as a technology partner, Oracle will be responsible for managing TikTok’s user data in the United States. The data, as per TikTok, is presently stored on Google’s cloud.
Sequoia and General Atlantic to get minority stakes in TikTok U.S.
The Redwood City-based firm is also interested in getting a stake in TikTok’s operations in the U.S. A few of ByteDance’s prominent investors like Sequoia, and General Atlantic, sources said on Monday, will also get minority stakes in the U.S. operations of TikTok.
In related news, Oracle Corporation said last week that it had secured new business from McDonald’s and Xactly.
Oracle performed fairly upbeat in the stock market last year with an annual gain of just under 20%. At the time of writing, it is valued at £136 billion and has a price to earnings ratio of 17.88.
The post ByteDance chooses Oracle over Microsoft as a partner for the U.S. arm of TikTok appeared first on Invezz.