Amazon Joins TikTok US Buyout Race? Retail Traders Cheer Potential Deal
Amazon may have synergy in lapping up TikTok as the app, which has 170 million users in the U.S., is a major hub of online shopping.
E-commerce giant Amazon, Inc. (AMZN) has thrown its hat into the ring to buy the U.S. arm of Chinese short-video app TikTok, joining a crowded field of suitors.
Citing a person briefed on the matter, a New York Times report said Amazon made the bid through a letter addressed to Vice President J.D. Vance and Commerce Secretary Howard Lutnick.
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The report also said President Donald Trump was to meet with top White House officials Wednesday regarding a potential deal for keeping TikTok operational in the U.S.
Amazon may have synergy in lapping up TikTok as the app, which has 170 million users in the U.S., is a major hub of online shopping, with influencers recommending products to users, the report added.
The Jeff Bezos-founded company previously attempted to build a TikTok clone called Inspire but without much success.
When TikTok was forced to sell to U.S. investors in 2020, Microsoft Corp. (MSFT) and Walmart, Inc. (WMT) separately made a bid for the company.
This time around, there is a spate of suitors, including Larry Ellison's Oracle Corp. (ORCL), Liberty Project, founded by former Los Angeles Dodgers owner Frank McCourt, Tesla CEO Elon Musk, and YouTuber Mr. Beast.
Last week, Reuters reported that asset manager Blackstone, Inc. (BX) is considering picking up a minority investment in TikTok's U.S. operations. The firm is reportedly in talks with TikTok's non-Chinese shareholders, led by Susquehanna International Group and Great Atlantic, regarding the investment.
A separate Reuters report said Zoop, a startup founded by OnlyFans founder Tim Stokley along with cryptocurrency foundation Hbar have teamed up to bid for TikTok.
A Financial Times report said Wednesday venture capital firm Andreessen Horowitz is in talks to add new outside investment as part of an Oracle-led deal.
Mobile marketing platform AppLovin, Inc. (APP) has also made a shy at the ByteDance-owned app, with support from casino magnate Steve Wynn, the Wall Street Journal said.
Wedbush analyst Daniel Ives expects some outline of a deal to be announced by the White House before Friday night, with a likely deadline extension by 30 days or longer.
TikTok sale has been necessitated by security concerns regarding user data, with the government calling for divestment of the U.S. unit of the app to an overseas entity or face potential suspension in the country.
According to Ives, Oracle is the top contender, given it already serves as TikTok’s primary cloud provider.
On Stocktwits, sentiment toward Amazon stock flipped to ‘bullish’ (69/100) by late Wednesday, from ‘bearish’ a day ago, and the message volume perked up to ‘high’ levels.
A retail watcher said they were bullish on the rumored deal to buy TikTok.
Another user premised his optimism on the pullback to the $184 level amid Trump’s tariff announcement. They saw the valuation as attractive to buy for the long-term.
Amazon stock rose 2% on Wednesday to $196.01 but plunged over 6% in the after-hours.
The e-commerce retailer’s stock has fallen over 10% this year.
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