Oracle Stock Jumps After Forming TikTok Joint Venture

TikTok and Chinese owner ByteDance signed agreements with Oracle and two other investors to form a new U.S. joint venture. Oracle stock jumped on the news. CEO Shou Zi Chew told employees in a memo viewed by Barron’s that the joint venture will be 50% held by a consortium of new investors, which includes Oracle, Silver Lake, and MGX. Each of those firms will hold 15% in the new entity, named TikTok USDS Joint Venture LLC.

ByteDance will retain a 19.9% stake, and affiliates of certain existing investors of ByteDance will hold 30.1% of the venture. It wasn’t immediately clear who the remaining investors are. Oracle stock was up 7.3% at $193.16 on Friday and was on pace for its largest percentage increase since Sept. 10, according to Dow Jones Market Data.

The memo states that the joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance. The deal will close on Jan. 22. Vice President JD Vance previously stated that such a venture would be valued at $14 billion. While that looks like something of a bargain against ByteDance’s latest reported valuation of $480 billion, it could reflect the relatively mature nature of the U.S. social-media market. Much of ByteDance’s valuation is likely tied to the faster-growing global market.

TikTok is still growing in the U.S. It had 130.9 million active American users a month in the second quarter of this year, up 8% from the same period in 2024, according to app tracker Sensor Tower. The development is the latest in a saga that has played out over several years. President Donald Trump, during his first term as president, wanted TikTok banned. And lawmakers from both political parties have stated concerns that TikTok, under Chinese ownership, poses a threat to national security. TikTok has denied this.

In April 2024, former President Joe Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act into law, which banned TikTok and other apps owned by ByteDance from operating in the U.S. unless those apps were sold to an owner that isn’t controlled by a foreign adversary. The app went dark for a brief period in January.

Trump signed an executive order on Inauguration Day that kept the app running in the U.S. In September, he signed an executive order that approved a proposed deal to keep TikTok running in the U.S. Questions remained regarding how the government would ensure the security of U.S. user data in a deal with ByteDance. Wall Street and TikTok users are both waiting to see what’s next. Capital Alpha analyst Robert Kaminski wrote in a note on Friday that “we don’t think this will be the end of the story.

Terron Gold