Walmart is moving closer to inking a major digital media deal that could shift the balance of the social media sphere.
The Bentonville retailer has tentatively agreed to purchase an approximately 7.5 percent stake in TikTok, the Chinese-owned video-sharing, social networking app. Walmart filed a statement with the Securities and Exchange Commission (SEC) on Saturday, Sept. 19 that it is in discussions to invest in TikTok Global.
Currently, the dollar amount on the deal has not been announced.
Under the deal, ByteDance will retain 80 percent control of the new company with Oracle taking 12.5 percent. Walmart CEO Doug McMillon would serve as one of the five board members for the newly created company.
According to the SEC statement, this deal would allow Walmart to leverage its “ecommerce, fulfillment, payments and other omnichannel services to TikTok Global.” Yahoo! Finance has laid out the implications for this aspect of the deal. The site posits that the TikTok deal could allow Walmart to identify trends and exploit them before rivals and create a real-time marketplace for its goods, among other benefits.
The deal has not been finalized and is still subject to approval by regulatory bodies. However, President Donald Trump has given his thumbs-up for the deal. In recent months, Trump has railed against TikTok and ByteDance due to concerns over security risks posed by China.
On Saturday, Sept. 19, Trump gave the TikTok deal his “blessing,” allowing Oracle and Walmart to move forward with a potential purchase and averting a shutdown of TikTok downloads in the United States.
TikTok officials have acknowledged the furor over the company’s potential security risks. In a corporate blog post, TikTok interim head Vanessa Pappas outlined the company’s actions in response to the data and security apprehensions.
“With our success has come added scrutiny. We appreciate this, as the tech industry has rightfully been asked tough questions in recent years. While we strongly disagree with the implications of TikTok as a national security threat, we nonetheless understand the concerns,” she wrote.
Pappas said that TikTok has hired a new chief security officer, launched a transparency and accountability center that allows experts to inspect the company’s algorithm, code and moderation practices, and has published transparency reports.