AsianFin -- U.S. investors may own a majority of stake in the local business of TikTok after President Donald Trump further extended the deadline for a ban on the popular short video application.
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An investor consortium including Oracle Corporation, Silver Lake, a private equity firm, and venture capital firm Andreessen Horowitz will form a new U.S. entity to control TikTok’s business in the country under a framework that Washington and Beijing are finalizing, the Wall Street Journal on Tuesday cited people familiar with the matter.
Under the proposed terms, the investor group will reportedly own a combined around 80% stake in the TikTok U.S. business and Chinese investors will hold the rest. It was said current U.S.-based ByteDance investors, including Susquehanna, KKR and General Atlantic, will be part of shareholders controlling 80% of TikTok. Under a 2024 U.S. law, TikTok's Chinese parent company, ByteDance, must reduce its stake in the U.S. version of the app to under 20% to avoid a ban.
As part of reported arrangement,existing U.S. users need to shift to a new app that TikTok has built and is testing, and TikTok engineers will re-create a set of content-recommendation algorithms for the app, using technology licensed from ByteDance.
The U.S. government will designate a member to the new TikTok company’s board of directors, which is set to be controlled by American members, according to the report.
CNN later echoed the report, stating investors including Oracle, Andreessen Horowitz and Silver Lake would create a new U.S.-based company running TikTok domestically, with a U.S.-dominated board including a member appointed by the Trump administration.
“Any details of the TikTok framework are pure speculation unless they are announced by this administration,” a senior White House official told these aforementioned media outlets.
Trump on Tuesday signed an executive order, formally extending the deadline to keep TikTok alive in the United States until December 16. That was the fourth time Trump prolonged the deadline for TikTok to divest its U.S. assets in the local companies or face a ban. The TikTok originally was set to take effect on January 19, and , a day before Trump’s inauguration, and the most recent extension expired Wednesday.
Trump on Monday suggested his administration would finalize a deal with China to allow TikTok to continue operating in the country, as part of results of a high-level trade talks between U.S. and Chinese officials held in Madrid, Spain.
During the “big Trade Meeting” between the U.S. and China, a deal was reached “ on a ‘certain’ company that young people in our Country very much wanted to save,” Donald posted on his social media platform Truth Social. Trump said the meeting held in Spain has gone “VERY WELL” and he will be speaking to Chinese President Xi Jinping on Friday.
China on Monday confirmed senior Chinese officials and their U.S. counterparts have clinched a framework agreement on the TikTok issue through their high-level trade talks in Spain.
During a two-day meeting with U.S. officials in Madrid, China and U.S. engaged in candid and in-depth discussions on TikTok and the relevant concerns of the Chinese side, and the two sides reached a basic framework consensus on resolving issues related to TikTok through cooperation, reducing investment barriers and promoting relevant economic and trade cooperation, said Li Chenggang, China international trade representative with the Ministry of Commerce (MOFCOM) and vice minister of commerce, the state news agency Xinhua reported.
When asked about the framework deal on Tuesday, Trump repeated he would discuss the TikTok issue with Xi on Friday. He has said there are companies that want to buy the social media app owned by ByteDance and that details about its potential suitors would be announced soon.
