The share price of Microsoft continues to rise on Monday, surpassing its 52 week high price, after it confirmed on Sunday that it was continuing with talks to buy TikTok, the popular social-media platform’s U.S operations.
Microsoft market capitalization has risen above $1.6 trillion dollars as the share price rose by over 5%, selling at $217.64 per share at one point.
According Microsoft, it plans to finalize the discussions with TikTok’s parent company, ByteDance by 15 September 2020. The proposal involves a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.
Microsoft added that the talks would continue following a discussion between Microsoft CEO Satya Nadella and President Donald Trump.
“Microsoft fully appreciates the importance of addressing the President’s concerns,” Microsoft said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”
“The discussions with ByteDance will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States (CFIUS). The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets. Microsoft may invite other American investors to participate on a minority basis in this purchase.
“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections. The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries,” according to Microsoft.
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Shares of Microsoft have gained over 35% year-to-date.
President Trump who has threatened to ban TikTok from operating in the United States over securities concerns on Monday gave his verbal approval to a potential deal between TikTok and an American company like Microsoft but said TikTok had until Sept. 15 to close such a deal or face a U.S. ban.
“Here’s the deal. I don’t mind if — whether it’s Microsoft or somebody else — a big company, a secure company, a very American company buys it,” Trump told reporters at the White House. “It’s probably easier to buy the whole thing than to buy 30 percent of it.”
Treasury Secretary Steven Mnuchin, who chairs the Committee on Foreign Investment in the United States, said Sunday that Republican and Democrat leaders “all agree there needs to be a change.”
“I’ve said publicly that it’s under review. I will say publicly that the entire Committee agrees that TikTok cannot stay in the current format because it risks sending back information on 100 million Americans” Mnuchin told ABC.