ByteDance To Join Up With Oracle, To Abandon TikTok US Sale – Report
ByteDance is pursuing a partnership with Oracle as a way to avoid the sale of US operations of its TikTok business, Reuters reported.
According to the Reuters report, Oracle (ORCL) will become ByteDance’s preferred technology partner and will take control of TikTok’s US operations. Additionally, Oracle is also in talks to take an equity stake in TikTok’s US assets.
Notably, President Donald Trump administration had imposed a deadline of September 20 for the Beijing-based company to announce a sale of TikTok’s US business by September 20 or face a complete ban by September 29. Therefore, the company had been in talks with companies including Walmart and Microsoft to divest the TikTok’s US assets.
However, by partnering with Oracle, ByteDance hopes that it could avoid the ban without selling the business. Microsoft said ByteDance had informed it that it would not be selling it TikTok’s U.S. operations, according to the report.
For Oracle, the transaction would provide exposure in the fast-growing social media industry and help diversify its business from only enterprise-facing to consumer-facing as well. Oracle has significant technological prowess in handling data. (See ORCL stock analysis on TipRanks).
On September 11, Barclays analyst Raimo Lenschow raised Oracle stock’s price target to $59 (3.5% upside potential) from $52 and reiterated a Hold rating. Lenschow is impressed with the company’s strong 1Q results despite continued macro-economic headwinds.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 7 Buys, 15 Holds, and 1 Sell. The average price target of $60.14 implies upside potential of about 5.5% to current levels. Shares are up 7.6% year-to-date.
Laureate Education Soars 9% On Walden University Deal
Oracle Up 3% In Pre-Market As Cloud Business Drives Upbeat 1Q Results
UBS Downgrades Expedia To Hold On Travel Demand Concerns; Shares Fall