Shares of Oracle Corp, Microsoft Corp and Walmart Inc, all potential suitors of TikTok US crumbled on Monday following China's move to constrain certain technology exports gave rise to worries that the country could block any deal for the company's US assets.
The new rules surrounding tech exports mean that ByteDance's sale of TikTok US operations may require clearance from Beijing, a Chinese trade expert said on Sunday to the state media. This is a requirement that could potentially complicate the politically charged and forced divestment.
Premarket Losses of the Trio
Shares of Walmart, Microsoft and Oracle fell between 1 percent and 2.5 percent in morning trading. All three pared some premarket losses after CNBC reported earlier in the day that TikTok has chosen a bidder and a deal could be announced as early as Tuesday.
TikTok leadership said in a memo to employees earlier last week that the company was "moving quickly to find resolutions to the issues that we face globally, particularly in the U.S. and India".
Revised List of Technologies
China, however, late on Friday revised a list of technologies banned or restricted for export for the first time in 12 years. Cui Fan, a professor of international trade at the University of International Business and Economics in Beijing, said the changes would apply to TikTok.
"That probably throws a wrinkle in it, but I don't think that causes the deal not to get done," Edward Jones analyst Brian Yarbrough said. "It has been pretty clear that if this deal doesn't get done, then they're going to ban it in the United States and that's terrible for all parties."
(With inputs from agencies)