The ongoing TikTok deal between Oracle (NYSE: ORCL), Walmart (NYSE: WMT) and ByteDance has been one of the biggest pieces of business news going on at the moment. Oracle ended up beating out Microsoft as the main buyer for the social media platform, with Walmart being a secondary buyer as well. However, the deal is currently awaiting official approval from Beijing authorities, a hurdle that’s slowing down the overall process. Although Trump had signed an official ban on downloading the TikTok app, a federal judge has overruled this decision, buying the company some much needed time to seal the deal with Chinese authorities.
Judge Carl Nichols from the U.S. District Court of Washington announced on Sunday, just four hours before the ban would take effect, that the Trump ban would be overruled. Although the President had given the deal his tentative approval earlier this month, the Chinese government still has the potential to stop the deal, should it want to. At the moment, the CCP is still weighing its options.
TikTok has quickly become one of the fastest-growing social media apps on the planet, with the main secret to its success being its underlying technology; its algorithms that recommend new videos to users. While ByteDance will be allowing Oracle and Walmart to review the source code of the platform for data security reasons, the Chinese might not be satisfied with this.
TikTok’s lawyers argued in court on Sunday that the ban on downloads is excessively harmful to the business, and that the date should be pushed back considering how close all parties are to make a deal. “This is just punitive. This is just a blunt way to whack the company now while doing nothing to achieve the stated objective of the prohibitions,” said lawyer John Hall in a statement.
The prosecutors in the case from the Justice Department argued that the government intended to prevent TikTok from potentially compromising even more user data.
Shares of both Walmart, as well as Oracle, are trading down a little in pre-market trading in light of the news. Ever since it seemed that the deal was likely to go through, shares of both companies have inched up a little, although the two companies have performed quite differently over the past year. Since the start of the year, Walmart has shot up significantly as e-commerce demand continued to grow throughout the pandemic. Oracle, on the other hand, has been struggling for the past while, with legendary investor Warren Buffett going so far as to abandon his stake in the company. For Oracle, this TikTok acquisition could help revitalize the company with a fast-growing business segment.
Oracle Company Profile
Oracle sells a wide range of enterprise IT solutions, including databases, middleware, applications, and hardware. The firm is undergoing a mix shift toward cloud-based subscriptions that should necessitate continued heavy investment in the business model transition. Oracle offers software-as-a-service, platform-as-a-service, and infrastructure-as-a-service offerings. Legacy offerings include Oracle Database software and Oracle Fusion Middleware. – Warrior Trading News
