Photo: VCG

 Some of the biggest US firms have been competing to buy TikTok's US operations. A possible lower price amid the Trump administration's clampdown on the Chinese-made app has raised the eyebrows of industry observers, who noted that odds are high for TikTok to ultimately say no to the outrageous deal.

Retail giant Walmart announced its team-up with Microsoft for TikTok. "We are confident that a Walmart-Microsoft partnership would meet the expectations of US TikTok users, while satisfying the concerns of US government regulators," read an online statement on Thursday (US time).

Walmart's interest in TikTok comes as no surprise, Liu Dingding, a Beijing-based independent internet analyst, told the Global Times on Friday, citing the retail giant's digitization push that began a decade ago, and lucrative gains expected from the possible incorporation of TikTok functions into its business. 

"The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets," the Walmart statement said. 

Bagging TikTok, which is shaking up the social media sector, is tremendously alluring for these US businesses hoping for social media-enabled commercial success, Fang Xingdong, founder of Beijing-based technology think tank ChinaLabs, told the Global Times on Friday.

A possible deal is set to value the app's US operations at $20-30 billion, and could be struck in the next 48 hours, CNBC reported Thursday, citing unidentified people familiar with the matter. 

A rival offer from Software giant Oracle would "comprise $10 billion in cash, $10 billion in Oracle stock and 50 percent of annual TikTok profit to flow back to TikTok's China-based parent company, ByteDance, for two years," news site TheWrap reported Thursday, quoting someone with knowledge of the deal.

TikTok and Microsoft didn't respond to a request for comment as of press time. Oracle could not be immediately reached for comment. 

The reported acquisition price significantly undervalues TikTok, an internet phenomenon without an industry peer to benchmark against, industry watchers said.

"The deal was forced, which doesn't reflect the normal market value [of TikTok]," Fang said.

Tech and innovation shares have been hotly sought after by global investors, meaning the hugely popular video-sharing app - the quickest app to hit about a billion active users worldwide, including over 100 million in the US - deserves a greater valuation, Liu said, adding even previous reports of the firm's value of up to $100 billion falls short of its true worth.

In February 2014, Facebook purchased the messaging app WhatsApp for $19 billion in cash and stock. The amount was considered stunning at that time for WhatsApp, which barely made any money and was largely popular outside the US market. Six years since, tech shares can't be mentioned in the same breath. Facebook's shares have soared nearly five times since the acquisition.

The stocks of FAANG - which stands for Facebook, Amazon, Apple, Netflix, and Google's parent Alphabet - have pulled off a seemingly unstoppable rally this year. Chinese tech giants listed in overseas and domestic exchanges have also made similar gains. 

Pricing the deal too low would be unacceptable for TikTok, as ByteDance is suing the Trump administration over its pending ban, which is still likely to put the deal in limbo, Liu said, and there's a chance of the sale being resisted eventually.

As Fang put it, the deal, essentially a robbery, is highly likely to be aborted. 

TikTok. Photo: VCG

 Some of the biggest US firms have been competing to buy TikTok's US operations. A possible lower price amid the Trump administration's clampdown on the Chinese-made app has raised the eyebrows of industry observers, who noted that odds are high for TikTok to ultimately say no to the outrageous deal.

Retail giant Walmart announced its team-up with Microsoft for TikTok. "We are confident that a Walmart-Microsoft partnership would meet the expectations of US TikTok users, while satisfying the concerns of US government regulators," read an online statement on Thursday (US time).

Walmart's interest in TikTok comes as no surprise, Liu Dingding, a Beijing-based independent internet analyst, told the Global Times on Friday, citing the retail giant's digitization push that began a decade ago, and lucrative gains expected from the possible incorporation of TikTok functions into its business. 

"The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets," the Walmart statement said. 

Bagging TikTok, which is shaking up the social media sector, is tremendously alluring for these US businesses hoping for social media-enabled commercial success, Fang Xingdong, founder of Beijing-based technology think tank ChinaLabs, told the Global Times on Friday.

A possible deal is set to value the app's US operations at $20-30 billion, and could be struck in the next 48 hours, CNBC reported Thursday, citing unidentified people familiar with the matter. 

A rival offer from Software giant Oracle would "comprise $10 billion in cash, $10 billion in Oracle stock and 50 percent of annual TikTok profit to flow back to TikTok's China-based parent company, ByteDance, for two years," news site TheWrap reported Thursday, quoting someone with knowledge of the deal.

TikTok and Microsoft didn't respond to a request for comment as of press time. Oracle could not be immediately reached for comment. 

The reported acquisition price significantly undervalues TikTok, an internet phenomenon without an industry peer to benchmark against, industry watchers said.

"The deal was forced, which doesn't reflect the normal market value [of TikTok]," Fang said.

Tech and innovation shares have been hotly sought after by global investors, meaning the hugely popular video-sharing app - the quickest app to hit about a billion active users worldwide, including over 100 million in the US - deserves a greater valuation, Liu said, adding even previous reports of the firm's value of up to $100 billion falls short of its true worth.

In February 2014, Facebook purchased the messaging app WhatsApp for $19 billion in cash and stock. The amount was considered stunning at that time for WhatsApp, which barely made any money and was largely popular outside the US market. Six years since, tech shares can't be mentioned in the same breath. Facebook's shares have soared nearly five times since the acquisition.

The stocks of FAANG - which stands for Facebook, Amazon, Apple, Netflix, and Google's parent Alphabet - have pulled off a seemingly unstoppable rally this year. Chinese tech giants listed in overseas and domestic exchanges have also made similar gains. 

Pricing the deal too low would be unacceptable for TikTok, as ByteDance is suing the Trump administration over its pending ban, which is still likely to put the deal in limbo, Liu said, and there's a chance of the sale being resisted eventually.

As Fang put it, the deal, essentially a robbery, is highly likely to be aborted. 


Newspaper headline: TikTok may reject reduced sale price of US operations: analysts