The US President Donald Trump has signed an executive order titled “Saving TikTok while protecting national security,” mandating the divestiture of TikTok’s US operations from its Chinese owner, ByteDance. This move aims to address longstanding national security concerns while allowing the app’s millions of American users to continue enjoying its services.
The executive order outlines that TikTok’s US application will be operated by a newly established joint venture based in the United States. This venture will be majority-owned and controlled by US entities, with ByteDance and its affiliates holding less than 20% ownership. The remainder will be owned by various investors, ensuring the app is no longer under foreign control.
Details of the TikTok Deal
The deal, reportedly valuing TikTok’s US operations at $14 billion, marks the first time the app has been given a formal price tag. President Trump stated that he had discussed the matter with Chinese President Xi Jinping, who reportedly expressed no objections to the divestiture.
Trump mentioned that prominent figures such as Michael Dell and Rupert Murdoch, along with several other high-profile investors, would be involved in the deal. “This is going to be American-operated all the way,” Trump asserted. However, the White House has not provided details on how it arrived at the $14 billion valuation. For context, ByteDance values itself at approximately $330 billion.
Oracle’s Stock Dives
In a related development, Oracle, a 48-year-old US technology company, saw its stock plunge by 5.5% in a single session, contributing to a broader decline in the Nasdaq and overall Wall Street performance. Oracle, which has recently gained attention due to its investments in artificial intelligence, has faced skepticism over the sustainability of its stock surge.
“A rational investor must short this,” quipped JP Morgan’s former head strategist, reflecting growing concerns about a potential AI stock bubble.
Oracle’s recent market performance had briefly elevated its CEO, Larry Ellison, to the status of the world’s richest person, surpassing Elon Musk. However, the latest downturn has raised questions about the company’s future trajectory.
Australian Dollar Under Pressure
Meanwhile, the Australian dollar has dipped towards 65.55 US cents, influenced by a strengthening US dollar. The Commonwealth Bank of Australia (CBA) has suggested that the AUD could face further declines if upcoming US inflation data reveals unexpected price increases, potentially exacerbated by the impact of Trump’s tariffs.
“We doubt AUD/USD will test the next support at 0.6428 (50% fibbo) just yet,” CBA noted, adding that the Reserve Bank of Australia’s upcoming policy meeting could further influence the currency’s movement.
The Reserve Bank of Australia is expected to maintain the cash rate at 3.6%, a decision anticipated to be straightforward given the current economic conditions.
Looking Ahead
The TikTok divestiture deal represents a significant shift in the landscape of social media ownership in the US, with implications for both international relations and domestic market dynamics. As the situation unfolds, investors and policymakers alike will be closely monitoring developments.
For Oracle, the recent stock drop underscores the volatility associated with tech investments, particularly those tied to emerging technologies like AI. The company’s future performance will likely depend on its ability to navigate these challenges and capitalize on growth opportunities.
As for the Australian dollar, its trajectory remains uncertain, contingent on both domestic economic policies and broader global financial trends. The upcoming Reserve Bank meeting and US economic data releases will be critical in shaping its path forward.
