Walmart Stock Zooms On Joint Bid With Microsoft For TikTok As Kevin Mayer Exit Continues To Reverberate

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Walmart stock gained 5% — a major move for the typically sleepy, large-cap shares — on news today that the retail giant has teamed with Microsoft to explore a bid for TikTok’s U.S. operations.

Microsoft, along with Oracle and Twitter, had already been in the mix as a potential acquirer of the fast-growing social platform’s U.S. operations. But the Walmart element was a surprise, and is expected to accelerate the timetable for a deal, which is expected to be announced in the next few days. If an agreement is reached, it would boost Walmart’s entertainment profile. The company earlier this year sold its video on demand service Vudu to Fandango after years of exploring ways to scale it.

Already valued at $1.7 trillion, more than almost any U.S. company, Microsoft saw its shares move up 3% on the news.

Owned by ByteDance, the conglomerate founded by a Chinese entrepreneur, TikTok ran afoul of U.S. officials over suspicions that it was being used for malevolent purposes by China. On August 6, President Donald Trump signed an executive order saying the company would be banned in the U.S. unless it completes a sale to a U.S.-based company. The company filed suit this week over the order, disclosing its spectacular growth in the federal complaint.

“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” a Walmart spokesperson told CNBC, which broke the news of the joint bid with Microsoft. “We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of US government regulators.”

The valuation of the deal is a bit of a moving target but is believed to be in the $20 billion to $30 billion range.

Meanwhile, the stunning exit of TikTok CEO Kevin Mayer after only three months on the job is continuing to resonate in media, tech and finance circles. Given his track record, Mayer will not lack for incoming interest from a range of tech and media companies in the coming weeks and months even though his departure was sudden.

Before joining TikTok in the spring, he had a long run at Disney. In a senior strategy role, he spearheaded major M&A transactions like the Fox, Marvel, Pixar and Lucasfilm deals. He was then promoted to head the newly formed Direct-to-Consumer & International division, running the company’s streaming efforts and shepherding the successful launch of Disney+ last November. Once considered the heir apparent to longtime CEO Bob Iger, Mayer was passed over in favor of Bob Chapek when Iger passed the baton last February.

In separate notes to clients Thursday, Wedbush Securities analyst Daniel Ives said Walmart’s interest likely “seals the deal” that Microsoft — not Oracle or other bidders — will prevail. He also said the loss of Mayer is a “huge blow” to TikTok’s efforts to fight Trump in court.

“We believe Mayer, with his vast experience at Disney and one of the most respected industry veterans
globally, was a home run for TikTok when he got hired and ultimately was going to help the company navigate its regulatory challenges in the Beltway,” Ives wrote. “Clearly things have changed dramatically as Mayer noted in a letter to employees ‘the political environment has sharply changed’ since he signed to come on board as CEO.”

In a June webinar hosted by Peter Csathy, a seasoned digital investor and adviser through his Creatv University educational hub, Mayer didn’t address the palace intrigue at Disney but shed light on his exit.

“There comes a time in everyone’s career where you need to make a choice,” he said. “It seemed like the right time. I’m not getting any younger. If you really want to make a big splash, there’s just a timing factor to that. And there aren’t many companies like ByteDance and TikTok.”

Reached Thursday by Deadline, Csathy said “companies of all shapes and sizes will be clamoring him.” Instead of returning to traditional media, he added, Mayer will most likely be attracted by opportunities to run an emerging, disruptive company.

TikTok, which has seen its user base skyrocket more than 800% since the start of 2018, is such a company. But even in the short span of time after he started the job, the ground shifted substantially underfoot.

“Kevin joined a company with radically different possibilities,” Csathy said. “As soon as he joined, his world was rocked, as was TikTok’s.”

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