TLDR
- MGX acquires 15% stake in TikTok’s U.S. business, joining Oracle in the deal.
- U.S. companies will control over 65% of TikTok U.S. after the deal.
- ByteDance retains 19.9% in TikTok’s U.S. unit, easing U.S. regulatory concerns.
- MGX has previously invested in stablecoins and crypto exchange Binance.
Dubai Royal-Backed Fund MGX Buys 15% of TikTok U.S. Business in Major Stake Deal
In a significant move, MGX, a fund supported by Dubai’s ruling family and led by Sheikh Tahnoon bin Zayed Al Nahyan, is acquiring a 15% stake in TikTok’s U.S. business. This investment is part of a broader restructuring plan aimed at increasing American control of the popular video-sharing app, TikTok. The deal is seen as a strategic step to address concerns raised by U.S. regulators, especially during the Trump administration, regarding the platform’s ownership and data handling practices.
The restructuring is designed to ensure greater control over TikTok’s U.S. operations by American firms. As a result of this partnership, MGX and Oracle will collectively hold approximately 45% of the U.S. business. When combined with other American investors, the total U.S. ownership is expected to surpass 65%. ByteDance, the Chinese parent company of TikTok, will retain a 19.9% stake in the U.S. operations, maintaining a role in the company but with a reduced influence over its future direction in the U.S. market.
MGX and Oracle’s Strategic Partnership
MGX’s partnership with Oracle, a major American technology company, is pivotal in this deal. The two companies now control nearly half of TikTok’s U.S. business. Oracle, co-founded by Larry Ellison, has long been a player in the technology and cloud computing sectors. MGX’s involvement adds a new layer of depth to the investment, as the Dubai-backed fund brings significant financial resources and strategic interests to the table. The collaboration aims to strengthen TikTok’s presence in the U.S. while complying with the increasing demands for American oversight.
This partnership could enhance TikTok’s ability to navigate regulatory scrutiny while continuing to grow its user base and advertising revenues. As the platform’s influence in U.S. culture and advertising continues to expand, the structure of its ownership becomes a key factor in its ongoing success.
ByteDance’s Continued Stake in TikTok U.S.
Despite the restructuring, ByteDance, TikTok’s Chinese parent company, will retain a 19.9% stake in TikTok’s U.S. operations. This is a notable point in the deal, as it ensures that ByteDance maintains a foothold in the U.S. business while addressing American concerns about Chinese control over the platform. The 19.9% stake was likely designed to comply with U.S. demands for a more balanced ownership structure that would reduce concerns about data privacy and potential Chinese government influence over the app.
By reducing ByteDance’s direct influence, the deal also mitigates the risk of further regulatory challenges. The Biden administration has expressed interest in ensuring that TikTok operates transparently and securely within the U.S., and the restructuring is expected to appease those concerns by giving U.S. firms a majority share.
MGX’s Previous Investments and Influence
MGX, which has already shown its financial strength with investments like the $2 billion purchase of USD1, a stablecoin launched by Donald Trump’s World Liberty Financial, continues to make waves in major financial sectors. The stablecoin, backed by U.S. Treasuries and other financial assets, has seen MGX use it for large-scale deals, including its investment in the cryptocurrency exchange Binance. This shows MGX’s willingness to engage in high-profile, large-scale financial transactions and solidifies its role as a key player in global finance.
Through this deal, MGX now has a significant stake in the U.S. social media landscape, positioning itself at the center of TikTok’s expansion and development. The fund’s backing of TikTok’s U.S. operations offers it a prominent role in shaping the future of the platform in one of the world’s most lucrative markets for digital advertising.
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