In the ongoing situation with TikTok, most investors see Microsoft as the main contender to buy this Chinese-owned social media platform. However, it appears that another company might be interested in buying out TikTok as well. Most surprising of all, it’s not a tech or a social media company that’s interested. In fact, it’s none other than Walmart (NYSE:WMT), which made a bid towards buying out the fast-growing social media platform.
TikTok is currently facing a potential ban from the Trump administration unless its Chinese owner ByteDance finds a U.S. buyer to sell it to. Currently, ByteDance is asking for around $30 billion in exchange for the social media platform. However, most bidders haven’t come anywhere close to the $30 billion that ByteDance is hoping to receive. In comparison, Twitter had supposedly issued a bid around $10 billion back a couple of weeks ago, which goes to show that most U.S. companies think that ByteDance is somewhat desperate to sell TikTok due to the regulatory pressure.
It turns out that Walmart was initially working on a joint bid with Google to potentially buyout TikTok. Since then, Google seems to have lost all interest in this potential acquisition. However, it appears that Walmart has decided to forgo this approach, instead making a joint bid alongside Microsoft for joint ownership of the social media platform.
However, ByteDance’s founder, Zhang Yiming, has flirted with the idea of simply abandoning the sale process and just let his app get banned from the U.S. Among other things, Yiming seems frustrated that other tech companies aren’t willing to pay closer to the $30 billion price tag that he had originally expected TikTok would go for. While this is definitely a potential possibility, its more likely to be a negotiating tactic on the part of the Yiming, trying to push up the potential bids from Microsoft and Walmart.
As of right now, TikTok has until mid-September to find a buyer and officially finalize the transaction. In response, TikTok has filed a lawsuit challenging the executive order from President Trump, although it’s uncertain how this will fare. TikTok’s American CEO also announced his sudden resignation yesterday due mainly to the political and regulatory pressures the company is facing.
Shares of Walmart shot up around 6% in response to the news. Putting aside this TikTok business, Walmart has been one of the best-performing stocks so far this year in spite of the pandemic. Despite being in the retail sector, Walmart’s performance has been backed by its strong eCommerce segment, which has seen a significant increase in sales over the past few months.
Walmart Company Profile
America’s largest retailer by sales, Walmart operates over 11,300 stores under 58 banners, selling a variety of general merchandise and grocery items. It’s home market accounted for 76% of sales in fiscal 2019, with Mexico and Central America (6%), the United Kingdom (6%), and Canada (4%) its largest external markets. In the United States, around 56% of sales come from grocery, 33% from general merchandise, and 11% from health and wellness items. The company operates several e-commerce properties apart from its eponymous site, including Flipkart, Jet.com, and shoes.com (it also owns a roughly 10% stake in Chinese online retailer JD.com). Combined, e-commerce accounted for about 5% of fiscal 2019 sales. – Warrior Trading News