Yahoo Finance's Akiko Fujita and Zack Guzman discuss Oracle's reported plans to take a 20% stake in Tik Tok as the social media app awaits approval from President Trump.
ZACK GUZMAN: The saga that has played out in pressuring TikTok here, and ByteDance, parent company of the social media company, in shedding its US business due to national security concerns continues. But it could be coming to a wrap very soon. According to reports, the Treasury Department, TikTok owner ByteDance and Oracle have tentatively agreed to terms for Oracle's bid to takeover TikTok here in the US, as well as some other markets, as well as reports of President Trump is getting closer and closer to deciding, could be coming shortly here.
But the sign-offs wouldn't stop there, as "Wall Street Journal" reports that China also would have to sign off on all this. And here to discuss all that with us is Yahoo Finance's Akiko Fujita, who has been covering this extensively for us. And Akiko, I mean, the sign-offs required for this deal are reaching historic proportions.
AKIKO FUJITA: It is. But really, Zack, it all comes down to what the president believes will work in terms of addressing the national security concerns. And on that front, we did get that report from CNBC saying the president is expected to decide on this transaction within the next 24 to 36 hours, which would put it right up against that September 20 deadline that the president set initially when he signed that executive order, issued that executive order early last month.
So as you report, as you point out, there's a number of reports that are floating out there. But let's talk about the specifics that have been reported out in terms of the structure of this deal. We're talking about Oracle taking a 20% minority stake in TikTok. ByteDance would maintain a majority stake. Walmart reportedly also involved in this deal as a partner, although there are no specifics on what exactly Walmart's involvement will be in the deal here.
Oracle, in terms of the national security concerns, will review the source code to make sure that there is no backdoor to the Chinese government. Oracle also would look to handle the data of TikTok users. And then, of course, be the cloud provider, which would be a huge business for Oracle, given that there are a hundred million users on this platform in the US.
Now TikTok US will have a separate board of directors, that's at least according to NBC News. That board will be approved by the US government, which we should point out, is highly unusual when you think about the US government having a say in the board of a private company. Now NBC News also reporting that Doug McMillon, who is, of course, the CEO of Walmart, will also have a seat on that newly formed board of directors for TikTok US.
Now ultimately, all of this comes down to whether President Trump will be satisfied by the structure of this, whether he believes that national security concerns will be addressed. We did hear from the president yesterday weigh in on the transaction, saying conceptually, he would be opposed to ByteDance being allowed to hang onto a majority share, a controlling share of TikTok, saying he simply wouldn't be happy with that.
Now a source that's involved in direct talks of this has told me that one of the reasons the deal has been held up, is because of a significant disagreement among senior administration officials between the China hawks, the likes of Secretary of State Mike Pompeo, and then those like Treasury Secretary Steven Mnuchin, who believe this deal as it stands, should be allowed to move forward.
There is no question the partnership, or a joint venture, however you want to describe this deal, would be a significant softening of the stance of the president, when you consider it was just over a month ago, where he was calling for a ban of this app and a divestiture of that acquisition of Musical.ly and ByteDance. So really all comes down to whether the president feels, what he thinks about this deal. And CNBC at least reporting that it could be 24 to 36 hours before we get the final say from him.
ZACK GUZMAN: Yeah, and not to overlook too, some of the pressure coming from fellow Republicans here too, and Senator Marco Rubio among others saying that they're not sure that this will satisfy those national security concerns. So all very interesting. You wonder how big of a role, the fact that he's friends with Larry Ellison might be playing in that decision when we get it as well. But Akiko Fujita, appreciate you bringing us that.