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Frequent Contributor

Re: Oracle up 13% pre-market on winning Tik Tok bid


@chang wrote:

https://www.wsj.com/articles/microsoft-drops-out-of-bidding-for-tiktoks-u-s-operations-11600039821

https://finance.yahoo.com/quote/ORCL?p=ORCL&.tsrc=fin-srch


Secretary Mnuchin is on CNBC and referred to the ORCL bid as a proposal that needs to be reviewed, not a done deal.

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Re: Oracle up 13% pre-market on winning Tik Tok bid

@chang, @Intruder ,

I hope it stands I have owned ORCL for a long time, would be nice if this pop sticks.

Fishingrod

 

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Re: Oracle up 13% pre-market on winning Tik Tok bid

Would just taking stake in TikTok/ByteDance and moving US TikTok data to ORCL servers now work? New rules of the game? WMT was going to partner with MSFT with some stake, so it is apparently approaching ORCL for a stake too. ORCL is closer to WH than MSFT. Assumption that ORCL got the deal secured may be premature.

Since last year, TikTok has been using Google Cloud servers. MSFT was probably going to shift that to its Azure cloud but it is out now. ORCL is a tiny player in cloud servers. Big cloud players in the US are AMZN, MSFT, GOOGL, IBM.   https://www.gartner.com/en/newsroom/press-releases/2020-08-10-gartner-says-worldwide-iaas-public-clo...

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Re: Oracle up 13% pre-market on winning Tik Tok bid

 

It appears that ByteDance will not sell TikTok’s U.S. operations.
The tech upstart has decided not to sell or transfer the source code behind its popular video app.
Oracle was reportedly selected as a “trusted tech partner” instead.
This suggests that Oracle will provide cloud management for TikTok data.
Any deal will need to be approved by a governmental interagency group to ensure national security concerns are met. The U.S. government previously threatened to shut down TikTok on Sept. 20.
The clock is ticking...

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Re: Oracle up 13% pre-market on winning Tik Tok bid

So, if it is just a matter of cloud data management, what is so special about ORCL's tiny cloud business that is so fundamentally different than Google Cloud [currently used by TikTok], or MSFT Azure cloud [that would have been used if MSFT got the deal] or those by others?

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Re: Oracle up 13% pre-market on winning Tik Tok bid

 

"After more than six weeks, two White House executive orders, new Chinese regulations and multiple bidders, a deal for the social media app TikTok has boiled down to one main strategy: mitigation."

"The proposal is far from an outright sale of TikTok’s U.S. operations, as President Trump suggested in an Aug. 6 executive order. Instead, ByteDance designed a proposal to alleviate the pressure it was facing from China and the United States and to mollify all sides. Specifically, it structured the deal to satisfy some of Mr. Trump’s concerns while dodging new Chinese regulations that could allow Beijing to block an outright sale of TikTok, people with knowledge of the discussions said."

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Re: Oracle up 13% pre-market on winning Tik Tok bid

 

"The Trump administration said Friday it would bar the Chinese-owned mobile apps WeChat and TikTok from U.S. app stores as of midnight Sunday, a significant escalation in America’s tech fight with China that takes aim at two popular services used by more than 100 million people in the United States."

"Commerce Secretary Wilbur Ross, in an interview on Fox Business Network on Friday morning, said that the ban would initially have a much greater impact on WeChat. 'For all practical purposes it will be shut down in the U.S., but only in the U.S., as of midnight Monday,' Mr. Ross said."

"TikTok would also face some changes, but would still be allowed to function until Nov. 12, Mr. Ross said, at which point it would face a ban if there was no deal that satisfied the administration’s concerns."

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Re: Oracle up 13% pre-market on winning Tik Tok bid

The drama continues...

"U.S. President Donald Trump said on Saturday he supported a deal in principle that would allow TikTok to continue to operate in the United States, even as it appeared to conflict with his earlier order for China's ByteDance to divest the video app."

"TikTok will be owned by a new company called TikTok Global and headquartered in the United States, possibly in Texas, Trump said. Oracle Corp <ORCL.N> will take a 12.5% stake in TikTok Global and store all its U.S. user data on its cloud to comply with U.S. national security requirements, the companies said. Retail giant Walmart Inc <WMT.N> said it would take a 7.5% stake in TikTok Global."

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Re: Oracle up 13% pre-market on winning Tik Tok bid

The new TikTok Global be owned 12.5% by ORCL, 7.5% by WMT, so 20% by US companies, and 80% by private Chinese ByteDance.

But there is another math: ByteDance is 40% owned by US investors, so they indirectly own 0.40*80% = 32% of TikTok.

So, a new math says that US investors have 20% direct and 32% indirect control of TikTok Global, or a total of 52%.

Can both the US and China claim in their respective domestic releases that they will both control TikTok Global ?

New TikTok Global will reincorporate with HQ in the US, it will float some shares in a US IPO, ORCL will run its cloud [not GOOGL], and MSFT is left wondering what just happened? WMT passively went with the winner.

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