Mon, 09/14/2020 – 10:44
- ORACLE CONFIRMS SECRETARY MNUCHIN’S STATEMENT THAT IT IS PART OF PROPOSAL SUBMITTED BY BYTEDANCE TO TREASURY DEPARTMENT OVER WEEKEND IN WHICH ORACLE WILL SERVE AS TRUSTED TECHNOLOGY PROVIDER
Here’s the (extremely brief) statement.
REDWOOD SHORES, Calif., Sept. 14, 2020 /PRNewswire/ — Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider. Oracle has a 40-year track record providing secure, highly performant technology solutions.
Notice Oracle’s phrasing: the company will serve as “the trusted technology provider” for TikTok, not a buyer.
After they started trading following a brief halt by the exchange, the company’s shares surged early, but have fallen now that Oracle has emphasized once again that the only thing it “acquired” was a new client.
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Oracle shares surged Monday morning following last night’s late-breaking surprise that the Redwood City-based company, founded by one of President Trump’s biggest backers in Silicon Valley, had beat out Microsoft and Wal-Mart to become TikTok’s licensing partner in the US.
Reporters were quick to point out that the “deal” wasn’t actually a “sale”. Beijing imposed new restrictions earlier this month that would block the sale of TikTok’s “secret sauce” content-recommendation algorithm – hardly a “strategic asset” but certainly the most valuable component of TikTok’s business – effectively making a sale untenable.
“We did get a proposal over the weekend that includes Oracle as the trusted technology partner,” says @stevenmnuchin1 on @TikTok_us. “There has always been a critical factor for us driving national security is making sure the technology on American’s phones is safe.” pic.twitter.com/hvsh4DaXfL
— Squawk Box (@SquawkCNBC) September 14, 2020
But in a wide-ranging interview Monday morning with the hosts of CNBC’s “Squawk Box”, Mnuchin said that the White House had looked at Oracle’s offer, and that CFIUS would now be reviewing the deal. A verdict is expected before the official sale deadline, which is Sept. 20, Mnuchin clarified, helping to dispell some initial confusion about whether the date was Sept. 15 or Sept. 20.
Microsoft, which was working with Walmart to make a combined bid, had been seen as the more likely winner earlier in the process, but that was before Beijing sent the message over the weekend that it wouldn’t allow the algorithm to be sold.
Then, reports about talks cooling emerged, resulting in Microsoft not being asked to make revisions to its offer. Previously, there was speculation that Oracle might have an advantage if the ByteDance started getting cold feet about an outright sale of the US business. Oracle shares were up double-digits in permarket trade.
CFIUS is a panel within the Department of Commerce that must review and approve deals involving foreign buyers that could have implications for national security.
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Author: Tyler Durden