US Government Bans TikTok And WeChat

US Government Bans TikTok And WeChat

over 3 years ago2 mins

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Chinese giant ByteDance – which just missed the deadline to sell TikTok’s US operations – has been told to boogie: the US announced a ban of the social media app on Friday 🚫

What does this mean?

The ban – which also applies to Tencent-owned chat app WeChat – comes in two parts. From Sunday, Americans won’t be able to download the app, get software updates, or make any in-app transactions. And from November 12th, the app will be outlawed altogether – though TikTok might get back in America’s good graces if it agrees a sale by then.

Source: Bloomberg
Source: Bloomberg

Speaking of which, Oracle – alongside retail giant Walmart and a handful of private investors – overtook Microsoft last week to become the favorite to take on a stake in TikTok. Nothing can be made official till both the US and Chinese governments sign off, mind you ✍️ For the US, that means agreeing to keep American users’ data Stateside, while for China, it means making sure TikTok-parent ByteDance hangs on to its proprietary algorithms.

Why should I care?

When Microsoft and Oracle first entered the fray, investors initially bought into them both. But now that the most likely deal structure will leave Oracle just a part-owner of TikTok, those investors – potentially concerned by a smaller share of profit – initially ditched its shares on Friday 📱 Still, TikTok’s mooted plan to list on the stock market within a year quickly brought them back: the video app’s likely worth at least $50 billion, which could mean a potential windfall for Oracle and its shareholders.

Source: The Wall Street Journal
Source: The Wall Street Journal

In recent years, the US-China trade war has escalated from agriculture to companies. And investors seem to think this strategy will pay off in at least one way: American social media stocks – Facebook, Twitter and Snap’s – rose on Friday, likely because they’ll benefit from less TikToking.

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