Actually, Oracle (ORCL) is not buying TikTok. Microsoft dodged the disaster of a deal. – Idaho Reporter

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Actually, Oracle (ORCL) is not buying TikTok. Microsoft dodged the disaster of a deal.

In the struggle for the future of the popular TikTok app in the USA, a last-minute deal with the participation of the software company Oracle is emerging. However, it is no longer about a sale of the US business, but only about a role for Oracle as a “technology partner” in the U.S. market.

 

It was initially unclear whether this solution would satisfy US President Donald Trump. With reference to data security, he originally set the Chinese Tiktok owner Bytedance a deadline of mid-September to part with the US business.

On Monday night, Microsoft first announced that its offer for Tiktok had been rejected. The Windows giant had been negotiating for weeks to buy the TikTok business in the United States, Canada, New Zealand and Australia. The Chinese government had previously positioned itself to block such a deal. According to new rules from the end of August, “IT technologies with personalization based on data analysis”, among other things, may only be sold abroad with government permission. Tiktok software falls under this description.

A possible role for Oracle could be to store the data of American Tiktok users. Trump describes Tiktok as a security risk because Chinese authorities could gain access to American data via the app. In early August, he banned US companies and citizens from doing business with Tiktok – this ban is due to take effect in mid-September. Without a deal, Tiktok threatens to end in the US. Trump emphasized a few days ago that the deadline would not be extended. According to the order, it runs until September 20, while Trump repeatedly mentioned September 15 as the deadline.

Another Trump decree is also due to come into force in mid-November, according to which Bytedance must separate from all data from users in the United States. Bytedance is also no longer allowed to own property in the USA that is used for the operation of Tiktok. Tiktok rejects the allegations and emphasizes, among other things, that data from American users would not be transmitted to China.

So what did Oracle gained with this deal? It remains for us to see but ORCL stock will see a huge volatility on Monday morning with a possible sell-off on Tuesday.

Microsoft stockholders should be happy to own MSFT shares because this is a much stronger and better company without TikTok than what it would be in the case MSFT bought this app.

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