TikTok “Deal” With Oracle (ORCL) Suddenly Doesn’t Matter

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Summary

What might the latest TikTok news mean for the company, its consumer and potential investors? 24/7 Wall St. contributors Douglas A. McIntyre and Lee Jackson are here to break it all down.

Transcript

[00:00:004] Doug McIntyre: President Trump says that he has a deal with the Chinese or a Chinese company for TikTok to either be sold to somebody in the United States or to have it, all of its software disconnected from China, so they can’t try it. It’s unclear what they’ve got, but President Trump says they’ve got something.

[00:21:01] Lee Jackson: Yeah, they, they have some sort of structural deal. And of course, on the day that this came out, of course, Oracle took off again as he, as they think maybe Larry Ellison’s gonna be the buyer or the number one buyer in the consortium. And boy, if you’re an, if you’re an Oracle shareholder, it has just been like the best run this year ever.

[00:45:04] Doug McIntyre: Well, there’s two things I don’t like about the Oracle thing, and so that’s a little bit of a digression. The first one is, is that the last time the stock ran up was because of a forecast that was for many, many years out, right to start. The second one is who says that owning TikTok is a great business? I know it’s a good business. You know, I’m sure Instagram is a good business, but. We don’t know how good a business this is.

[01:15:22] Lee Jackson: No. You know, your pal Cramer, you know, who you’ve known for years. He said today, he said, buy whatever company is buying TikTok or is, is getting TikTok. And, and you gotta remember, and we’ve had this discussion for, for our viewers in the past that, you know, TikTok skews to a much lower demographic age-wise, and there’s a lot of, you know, older folks on it, but it’s, it’s ostensibly kids and teenagers dancing and doing stuff. So you may not get the revenue, but boy, you can get a lot of eyeballs with it. And I, I think it’ll be attractive to whoever gets it. I, I suspect it will.

[01:51:23] Doug McIntyre: Look. Jim Cramer and I have known each other almost 50 years and we’ve been fighting for almost 50 years, so it’s not like I’m gonna say, “oh gee, Jim Cramer said it. So that must. I mean, it’s great.” The, the question with TikTok to me is very simple. It does have algorithms that make people addicted to it. But do they get to keep all that stuff? Because it means that there’s a database algorithmically sorting what you see. That means that for TikTok to be worth a lot, the database with your habits and my habits has to continue to exist instead of everybody starting from zero

[02:32:00] Lee Jackson: Absolutely, for any deal, you would think.

[02:38:11] Doug McIntyre: I don’t know what to say, but if you look at TikTok, let’s say that it’s fairly valuable, who wants it? I guess they’re, they’re probably be an antitrust problem if, if Meta came in.

[02:51:20] Lee Jackson: Oh, yeah, absolutely. There would be. I think they’re out of the equation.

[02:55:06] Doug McIntyre: You might look at a distribution network the way that Musk’s, looks at, you know, Grok as a way to get, um, his AI model out, right? Which he uses the old, the old Twitter X to get the Grok downloads out. I’m gonna tell you, there’s a chance that this gets deferred again because President Trump has deferred this at least twice.

[03:21:07] Lee Jackson: Yeah.

[03:21:22] Doug McIntyre: He’s given 120 day extension twice. If we, if we hear tomorrow morning, there’s another 120 day extension, I wouldn’t be shocked. The last time I looked at this, which is a long time ago, they thought this was a hundred billion dollar deal. That’s it for roughly that to bite dance in China would get that kind of money. It’s all up in the air.

[03:47:02] Lee Jackson: It’s skewed higher just on a market, you know, basis.

[03:51:04] Doug McIntyre: I don’t think it’s gonna change what the user has as an experience. I don’t think it’s going to change the downloads which have probably started to cap out. It’s been around long enough. So listen, if somebody wants to throw a hundred billion dollars at it and it’s a public company within a few quarters, we’ll know if was a good investment.

[04:12:06] Lee Jackson: Yeah, it’ll be very interesting to see, and you’re right, especially if it’s, you know, tagged in or plugged into a currently public company. You know, and take a few quarters to see, you know, what the, what the revenue and everything would look like, but it could be strong. And for somebody like Oracle or, or even strangely, even enough, Yahoo and, and, and, and places. Yahoo. Yeah, Amazon rather might consider it just, just for the additional eyeballs and everything else. Not that they don’t have a zillion, but yeah, I think you’re right. It’s gonna interesting. Be an interesting fallout and it, with the president seemingly on to China reasonably soon, they could have something cooked up quicker rather than later.

[04:57:10] Doug McIntyre: Could be part of a big China package. Yeah, it really could.