Debating the ownership of the new company, the TikTok deal became a mess

Tram Ho

Two days after Mr. Trump said he would approve the deal so that TikTok could continue to operate in the US, the headlines revolved around the theme: who owns and dominates the new company’s operations. formed from the above deal.

Under a new agreement proposed last week, Oracle, Walmart will set up a company called TikTok Global – an American company to manage TikTok’s operations in the US. However, both Oracle and ByteDance, TikTok’s parent company, are making contradictory statements about who will be responsible for the management of the new company.

In its statement on Monday, ByteDance said it owns 100% of the subsidiary. And after raising more capital through the IPO, they will hold 80% of the company’s shares.

Tranh cãi quyền sở hữu công ty mới, thương vụ TikTok trở thành một mớ hỗn độn - Ảnh 1.

ByteDance’s possession of such a large controlling stake has clearly displeased Mr. Trump. Answering questions from reporters about TikTok Global’s ownership, Trump pledged to act if American companies did not control TikTok Global. “If we find they don’t have full control, we won’t accept the deal.”

And things turned around again.

On Monday afternoon, Oracle vice president Ken Glueck said that ByteDance would “have no ownership in TikTok Global” and that shares in the new company “would be distributed to owners” with American companies will be the largest shareholders.

Some sources of Financial Times said ByteDance is considering distributing TikTok Global shares to their existing investors, including Sequoia Capital, General Atlantic and Coatue Management. After this share distribution agreement, American companies will account for about 53% of TikTok Global’s shares.

However, other sources said that ByteDance’s backers from China are against distributing shares to existing investors.

Tranh cãi quyền sở hữu công ty mới, thương vụ TikTok trở thành một mớ hỗn độn - Ảnh 2.

Not only is there a contradiction in the statement who will own TikTok Global, the parties’ claims are also inconsistent about TikTok’s underlying technology or algorithm transfer in this agreement. While ByteDance said the deal would not cover “the transfer of source code or technology”, Oracle and Walmart stated that “all TikTok technology will be owned by TikTok Global” but did not specify. who controls it.

ByteDance understands that, if the deal leads to the transfer of technology to the US side, it will never be passed by Beijing after it has revised its export control laws, to ban the export of algorithms. artificial intelligence without a license. Thus, ByteDance’s statement only stated that, Oracle has “the right to conduct a security check of the US TikTok source code.”

These controversies are making the fate of this deal more obscure than ever. Anyway, all of the above controversy is likely to end soon by the end of this week, when the deadline for completing the ByteDance deal with Oracle and Walmart arrives.

Consult the Financial Times

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Source : Genk