TikTok Deal: Oracle, ByteDance Release Conflicting Statements on Company Ownership

By Dana Cruz Sep 22 2020, 03:42 AM EDT

Trump Issues Executive Orders Barring Transactions With TikTok And WeChat — In this photo illustration, the TikTok app is displayed on an Apple iPhone on August 7, 2020. Photo Illustration by Drew Angerer/Getty Images

The TikTok deal has become confusing as both Oracle and ByteDance claim majority ownership of the company.

TikTok's Chinese parent ByteDance and U.S. based Oracle are saying conflicting claims on who gets ownership of the revamped TikTok Global.

On Sunday, ByteDance said in a statement that it will own 80 percent of the company's stake under the TikTok deal. Their claim leaves 20 percent of the company to Oracle and retail giant Walmart.

ByteDance seems to have not completely and publicly given up its ownership, said a report from The Verge.

The report said TikTok Global will launch an IPO in the U.S. stock exchange, and ByteDance's interest in the company will then be further diluted.

But on Monday, Oracle EVP Ken Glueck said in a statement that "Americans will be the majority" in the TikTok deal and "ByteDance will have no ownership."

Oracle claimed that TikTok will completely lose ties with ByteDance. But this is also different from what earlier reports have noted that the U.S. companies will only take 20 percent stake in the new venture.

Ownership is an important aspect of the TikTok deal, as they were forced by the Trump administration to make a deal. But the conflicting statements could derail this altogether, said a report from Variety.

Oracle, Walmart Share isn't Disputed

Whether or not ByteDance does hold a majority share of the company, what isn't denied is the stakes the U.S. companies will hold. Oracle will have 12.5 percent stake and Walmart will get 7.5 percent of TikTok Global.

This is only 20 percent of the overall shares, as what ByteDance claimed. But this leaves 80 percent unaccounted for.

While ByteDance said they will get the remaining stake, Oracle said it will be divided among American investors. This includes four venture-capital firms.

These four firms are existing ByteDance investors: Susquehanna International Group, General Atlantic, Sequoia Capital and Coatue Management.

If these companies are counted, this gives TikTok Global a 53 percent U.S. ownership, as reported by Wall Street Journal.

This confusion on the new ownership may appear to stem from the need to appease political leaders in both the U.S. and China.

Amid the confusion, it is also clear that the company will have to be based in the U.S. and will run in a cloud operated by Oracle.

ByteDance will still control the app's AI algorithms. This algorithm has to power to give users video recommendations.

TikTok Deal Far from Trump's Demands

President Donald Trump said the deal was a "win" for the U.S. and gave it his "blessing" on Saturday.

As CNBC reported, Trump noted that the company is now owned and controlled by Americans. This is despite the fact that a large part of TikTok may still have its Chinese parent's say.

Trump said on Fox News Monday morning that the Chinese won't have anything to do with TikTok after the deal goes through. He added that Oracle and Walmart will have "total control" over the app.

But assuming Oracle does not have total control, he said, "then we're not going to approve the deal." He noted that ByteDance would have "nothing to do" with the app, and if they do, a deal just won't happen.