TikTok Jumping Through Hoops: Anticipated IPO & Hunt For A New CEO Amid White House Decision

Summary

• TikTok is eyeing to go public on the US stock exchange in about a year.
• IPO remains subject to a deal nod from Trump, diminishing the White House’s concerns on the App’s national security threat.
• Oracle Corp, the renowned Silicon Valley tech magnate, is eyeing to be a technology partner for the video App for its US$20 billion US operations.
• Reports suggest that the split-off company, labelled TikTok Global, may have most American directors, a US-based chief executive, and a security expert on its Board.
• TikTok is on a hunt for a new chief executive; reportedly in discussion with Instagram co-founder, Kevin Systrom.

TikTok has become the hottest point of disagreement between the world’s biggest economies, the United States and China, which have battled over trade, security, and tech dominance amid growth virus spat.

The popular short video app, especially famous amidst Gen Z and millennials, intends to go public on an American stock market in about a year’s time. The stock market consensus opines that an IPO of TikTok will be technology sector's one of the biggest-ever stock market debuts.

But the real question is whether ByteDance, TikTok’s owner, is able to obtain White House approval to stave off the US ban. Besides, TikTok has not had a CEO since late August 2020. The White House decision is anticipated by 20 September.

ALSO READ: Oracle eyeing TikTok operations as it spins off into a separate entity

ByteDance Races to Secure an Agreement with the White House

China's ByteDance is planning a US IPO of TikTok Global. This remains subject to clearance of ByteDance’s proposed deal with the US Government, which seeks to ensure data security of American TikTok users.

Reports suggest that the White House and ByteDance have agreed to a term sheet on some aspects of a deal. The approval from President Donald Trump is still pending.

The Treasury Department, leading the TikTok deal for national security purposes, has provided few revisions to its proposal to ByteDance. Some of these pertain to queries like-

• How will TikTok’s data as well as source code be secured?
• How will the App’s data and source code be handled?
• What are the technical details of the deal?

What remains a topic of debate for few and worry for others is the fact that there is no certainty over whether President Trump will sign off on the agreement. Besides, there is no clarity as of now on what assets TikTok Global would own beyond its assets in the US.

Meanwhile, the Trump administration is still looking at details of the deal to ensure if it meets national security thresholds.

GOOD READ: Are the tides turning against Chinese tech companies?

Trump Administration & ByteDance Clash

TikTok is currently facing the threat of getting banned in the USA. Consequently, its IPO has become a geopolitical football, kicked around by the Trump administration, which believes that the App poses a serious threat to national security.

President Trump has threatened that a TikTok ban could happen as early as next week.

Last month, President Trump ordered ByteDance to divest TikTok. His justification was that through the widely used App, the personal data of approximately 100 million Americans (who use TikTok) could be passed on to China's Communist Party government- a serious threat to America’s national security.

ALSO READ: China’s Internet Play: Issues, Censorship and ByteDance in Action

Chinese officials do not want ByteDance to say yes to a forced sale. Consequently, the Company's proposal to the White House called for it to retain majority ownership of TikTok. Reacting to this, President Trump has reportedly opposed the indications that ByteDance may retain majority ownership of TikTok.

GOOD READ: President Trump goes vocal on the US-China decoupling

TikTok Ownership Under the Scanner

The precise ownership structure of TikTok as per the proposed deal remains unclear. The Trump Administration suggests that as per their proposal, ByteDance cannot retain a majority stake in TikTok.

Meanwhile, Oracle Corp, the giant American technology MNC intends to become a technology partner for TikTok. Besides, Oracle may take an ownership stake in the app, but not own it outright. Another major investor in TikTok could be Walmart.

GOOD WATCH: Oracle beats Microsoft in the TikTok US deal Race

New CEO To Be Appointed Soon?

While the TikTok-Trump deal picks up steam, the video-sharing app has reportedly approached Instagram co-founder Kevin Systrom for filling in the position of CEO, after the departure of Kevin Mayer. However, reports suggest that talks with Kevin Systrom are in preliminary stages.

Kevin Systrom launched Instagram in 2010 with Mike Krieger. The power duo sold the App to Facebook in 2012 for USD 1 billion. Kevin Systrom remained CEO of the platform until September 2018.

It should be noted that TikTok does not have a CEO since late August 2020, when Kevin Mayer resigned from the role after merely three months on the job. Reports suggest that his concern was President Trump’s threat to ban the App in the US. TikTok’s US general manager, Vanessa Pappas, is currently its global leader.

The complex wrangling over what happens next to TikTok continues, though the related parties seem to edge closer to drive a hard bargain.

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