The New York Post this morning is reporting that even as TikTok CEO Shou Zi Chew was on Capitol Hill facing increased pressure to spin off the company's US business because of national security concerns, his boss - ByteDance founder Zhang Yiming - was in Arkansas meeting with Walmart CEO Doug McMillon.
The subject of the meeting could not be learned, and Walmart, ByteDance and TikTok have not commented on the report.
However, sources tell the Post that "two years ago Walmart had been in talks to partner with software giant Oracle to buy TikTok’s US operations under pressure from the Trump administration.
"ByteDance in recent weeks has pooh-poohed the prospect of a sale of its US business.
"Last week, the government officially said it would 'firmly oppose' any such deal.
"A week earlier, TikTok had insisted it was '100% false' when On The Money reported it had begun talks about a possible sale.
"However, when asked in recent days about Yiming visiting Arkansas, the company demurred."
The Post goes on: "Under the proposed deal with Oracle, Walmart – which has embraced TikTok as a way to reach younger shoppers – reportedly would have taken a 7.5% in TikTok’s US unit and McMillon would have taken a seat on the board."
- KC's View:
First of all, let's be clear. First of all, let's be clear. Best I can tell, this is not an early April Fools joke.
This is an unconfirmed report, and even if the meeting happened as reported - and it seems entirely credible to me - the stars would have to align correctly for such a deal to actually happen.
That said, I find it fascinating, and a potential game changer.
We know that TikTok has been growing its e-commerce footprint, and it is a platform that, as has been well documented, has 150 million, largely young, highly loyal US users. For Walmart to have a piece of that pie, with the ability to use that foundation to grow its e-commerce business, would be an enormous advantage.
I cannot imagine it would face any sort of regulatory challenge.
It seems likely that the US government will push for a ban of some sort if ByteDance is unwilling to spin it off. Scott Galloway keeps making the point that a spin is almost inevitable at the 11th hour, simply because there is too much money at stake that would be lost if a ban occurred.
Walmart-Oracle would be an intriguing, very American acquiring team.
And here's the bottom line - if this is properly marketed, this deal would make Walmart instantly cool and even heroic to generations of people that may not see it that way.
I have no idea if this happens, or how the economics will work out. But if it does, this deal would be a game changer.