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ByteDance says TikTok will become its subsidiary

ByteDance says TikTok will become its subsidiary
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ByteDance, the Chinese company that owns TikTok, said Monday that TikTok will become its subsidiary, despite the fact that Oracle and Walmart over the weekend said that U.S. investors would own most of the app.

In a Monday statement obtained by Reuters, ByteDance said it will own 80 percent of TikTok Global, a new U.S. company that will have ownership over most of the app’s operations internationally, contradicting Oracle and Walmart’s statement.

In a joint statement, Oracle and Walmart said the deal with President TrumpDonald John TrumpJudge rules to not release Russia probe documents over Trump tweets Trump and advisers considering firing FBI director after election: WaPo Obama to campaign for Biden in Florida MORE’s administration gave majority ownership of TikTok to U.S. investors, including a 12.5 percent stake for Oracle and a 7.5 percent stake for Walmart.

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But ByteDance called it a “rumor” that U.S. investors would own most of TikTok.

Oracle on Monday said ByteDance would have no ownership in TikTok Global.

“Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global," said Oracle Executive Vice President Ken Glueck. 

Walmart did not immediately respond to a request for comment. 

It's possible that the different explanations reflect the fact that U.S. investors own 41 percent of ByteDance itself. Adding those investors to Walmart's and Oracle's stake would account for more than 50 percent of the new company. 

The remarks from the companies came after Trump gave his blessing to the agreement on Saturday. Trump signed an executive order last month requiring that ByteDance sell TikTok within 90 days to continue operating in the U.S. Trump’s concern revolved around the Chinese company possibly providing American user data to the Chinese government.

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Under the deal, Oracle could look at TikTok U.S. source code but the algorithms and technologies would still be owned by ByteDance, the Chinese company said. Oracle and Walmart have said all of TikTok’s technology will be owned by TikTok Global.

TikTok confirmed to Reuters it will have an initial public offering for TikTok Global. Oracle and Walmart in their joint statement said four out of five board of directors will be Americans.

The news also comes as ByteDance said it heard for the first time it was setting up a $5 billion education fund in the U.S. after Trump announced the deal’s component on Saturday. ByteDance said TikTok is reportedly supposed to make $5 billion payment in taxes to the U.S. Treasury but the money isn’t related to the agreement.