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The ‘he said, she said’ of TikTok-Oracle-Walmart

September 21, 2020, 2:39 PM UTC

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It’s hard to keep all the facts straight in the ongoing saga of TikTok. Even as Oracle and Walmart are set to invest in the short-form video company, the trio can’t seem to agree on exactly what kind of deal is in the works.

On Saturday, Oracle and Walmart released a joint statement announcing that the U.S. government had tentatively agreed on a deal. As part of that deal, TikTok Global, the new proposed company that is to be U.S.-based, would be “majority owned by American investors” including themselves, with four out of five members in its board of directors hailing from America. Trump seized on the fact as he announced his rationale for the tentative agreement: “It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” he said ahead of a campaign rally in North Carolina on Saturday. “All of the control is Walmart and Oracle, two great American companies.”

Buuuuut TikTok’s parent company ByteDance had its own statement as well, publishing an online statement in Chinese that appeared to contradict the assertion that TikTok will be majority-owned by U.S. investors. In a post addressing “unfounded rumors” around the TikTok tie-up, ByteDance wrote: “TikTok Global plans to raise a round of pre-IPO financing, after which Bytedance will control 80% of the company.”

So why is each party giving discrepant accounts on who will own TikTok Global? Well, according to Bloomberg, ByteDance will hold a 80% stake in the company, but, since 40% of ByteDance is backed by American investors, that can also translate to U.S.-based investors having a majority financial stake in TikTok Global. What this all means for voting rights is another story. 

What has made this entire situation even more confusing is a statement from Oracle EVP Ken Glueck, who said in an email after ByteDance’s post went public: “Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.” 

It’s clear TikTok walks a thin line between China and the U.S. in its deal to keep operations running in the States, and all parties involved are very strategically playing up their best sides to both governments. If the reports are correct, their assertions of the percentages owned aren’t incorrect—they just omit some details that would make the deal look a little less attractive in each of their home nations.

After all, ByteDance’s deal still reportedly awaits approval in China. It stands to earn brownie points from the Chinese government just as Oracle and Walmart do from Trump.

UNITY’S UNUSUAL IPO: ‘Tis the season of pumpkin spice lattes and unusual ways of going public. Shares of gaming company Unity Software surged 44% on Friday after it raised some $1.3 billion through an initial public offering. 

What made this particular IPO different: While bank underwriters usually take on the main role of allocating and pricing shares in an IPO (which has resulted in criticism over banks underpricing IPOs or offering shares to preferred banking clients to the detriment of the company), Unity directly took orders from investors. “We wanted to make sure that investors we wanted were on the cap table and that we had the same expectations,” Unity CEO John Riccitiello told Term Sheet on Friday. “We felt like we were in a better position to set price and choose investors through a discovery process like that than we would’ve otherwise if that same discovery had happened on the same he-said-she-said model where bankers talk to investors and they whisper back what they heard.”

This doesn’t necessarily cut out the banks. Riccitiello noted that underwriters still introduced potential investors to the company.

JOIN US: On Wednesday Sept. 23 at 2 p.m. ET, I’ll be moderating an online panel called “Entering Hypergrowth: Lessons from NYC’s New Guards with Braze & BigID.” Hope to see you there.

Lucinda Shen
Twitter: @shenlucinda


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