Oracle has held preliminary talks with TikTok’s Chinese parent company ByteDance to buy the US operations of the video-sharing app, while discussions with Microsoft are ongoing.
Oracle (ORCL) is “seriously considering” acquiring TikTok’s business in the US, Canada, Australia, and New Zealand, the Financial Times reported. The software giant is already in preliminary discussions with US-based TikTok investors including venture capital firms General Atlantic and Sequoia Capital.
President Donald Trump on Friday formally ordered the Chinese owner of TikTok to divest its US assets setting a 90-day deadline for a deal to be announced by Sept. 15 or face a ban.
“There is credible evidence that leads me to believe that ByteDance, an exempted company with limited liability incorporated under the laws of the Cayman Islands […] might take action that threatens to impair the national security of the United States,” the executive order signed by President Trump read.
Until now, Microsoft (MSFT), has been viewed as the frontrunner in the acquisition talks for TikTok’s operations in the US, who said it will move “quickly” to pursue a deal, while continuing the dialogue with the US government, including with the President. In addition to the announced acquisition talks, the tech giant is reportedly also interested in buying the UK operations of the popular music video app.
Meanwhile, the FT report pointed out that Oracle’s billionaire co-founder Larry Ellison is one of the few US tech executives who has been openly supportive of Trump, though it’s not clear whether the software giant would be the White House’s preferred contender for TikTok.
Oracle shares are currently advancing 3.8% in Tuesday’s pre-market trading, with a 1.9% gain so far year-to-date. (See ORCL stock analysis on TipRanks).
Overall, Wall Street analysts are cautiously optimistic on the stock split between 7 Buys, 11 Holds and 1 Sell, which gives the stock a Moderate Buy consensus. Looking ahead, the average analyst price target of $55 implies a modest 1.9% upside potential to the current share price.
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