Re:Walmart Joins Talks to Buy TikTok
by crazygringo on Thursday August 27, 2020 @02:19PM
(#24296770)
Because Trump has ordered them to shut down if they aren't sold.
In the absence of any buyers that actually add value, and the fact that TikTok has no BATNA, this means it will almost certainly be sold below value.
Therefore, unlike most corporate acquisitions, this can be viewed as a pure "profit play", rather than relying on complicated synergies, economies of scale, fending off competition, etc. to justify the purchase.
In this light, the parent company doesn't really have to have anything in common with TikTok. It mostly comes down to which companies have a) the cash to purchase it, b) management that is smart enough not to mess it up, and c) the best use of the company's cash if the price is low enough.
In the end it will probably be purely a financial play, rather than the product/strategy play most acquisitions are. So the acquiring company just needs to be good at the basics of tech management. They just hire or keep on TikTok management that is good at the social media stuff.
In the absence of any buyers that actually add value, and the fact that TikTok has no BATNA, this means it will almost certainly be sold below value.
Therefore, unlike most corporate acquisitions, this can be viewed as a pure "profit play", rather than relying on complicated synergies, economies of scale, fending off competition, etc. to justify the purchase.
In this light, the parent company doesn't really have to have anything in common with TikTok. It mostly comes down to which companies have a) the cash to purchase it, b) management that is smart enough not to mess it up, and c) the best use of the company's cash if the price is low enough.
In the end it will probably be purely a financial play, rather than the product/strategy play most acquisitions are. So the acquiring company just needs to be good at the basics of tech management. They just hire or keep on TikTok management that is good at the social media stuff.