Pre-market inventory: Selling TikTok is a race against time


What’s happening: Beijing seems to have thrown a wrench into the process, reports my CNN Business colleague Sherisse Pham. Chinese authorities on Friday revised the rules governing the sale of certain types of technology to foreign buyers. The restrictions now cover data processing, speech and text recognition, according to government notices.

The reviews did not name TikTok or its Beijing-based owner ByteDance. However, experts say the rule change could give Beijing the power to block the sale of TikTok to a foreign company.

Former CEO Kevin Mayer indicated a sale was imminent when he stepped down from his post last week. In a letter to employees, Mayer said he expects “a resolution very soon” – a phrase indicating that a deal could be reached in the coming days, according to a person familiar with the talks.

Analysts reported a joint offer of Microsoft (MSFT) and Walmart (WMT) as an undisputed leader, however Oracle (ORCL) would also be in contention. Still, the Beijing update makes it clear that there is more at stake here than simply selecting from a list of suitors.

“Is that slowing things down, or does it mean that the value of this asset is not in the tens of billions mentioned recently, but maybe zero?” Rabobank strategist Michael Every said in a research note Monday. “If so, it would illustrate very strongly how private companies can be swept up in the changing political economy. “After all, discussions on TikTok don’t exist in a vacuum. The Chinese foreign ministry on Monday criticized the US administration, alleging it had engaged in “economic bullying” and “political manipulation” under the pretext of national security concerns.

Earlier this month, the U.S. Department of Commerce announced new sanctions against Huawei, one of China’s top tech companies. Paul Triolo, head of geotechnology at Eurasia Group, said the restrictions could serve as a “death blow” to the company and Beijing is likely to pursue targeted forms of retaliation in response.

Take a step back: Microsoft and Walmart’s pursuit of TikTok has received a lot of attention. But whether the Trump administration and Chinese officials can give the green light to a deal satisfactory to both sides in half a month is an open question.

The new Dow has arrived. He always plays catch-up

The Dow Jones Industrial Average, boosted by easy money from the Federal Reserve, has soared more than 50% since March. But it is struggling to keep pace with the S&P 500, the broader benchmark for US stocks.

The latest: While the S&P 500 is now up 8.6% in 2020, the Dow Jones is only 0.4% higher than it started the year. The index has yet to surpass its all-time high reached in February, even as the S&P 500 and Nasdaq record a series of new records.

Big changes are coming on the Dow on Monday, with S&P Dow Jones Indicies adding Salesforce to the index to balance the disruption of Apple’s equity division. Amgen and Honeywell are also expected to join, while ExxonMobil, Pfizer and Raytheon get the start.

But this reshuffle is unlikely to help close the gap with the S&P 500.

It has to do with how the Dow is built. Unlike the S&P 500, the Dow Jones is weighted by the share price of its constituents, not by market value. And while Salesforce has been in tears recently, that’s not enough to offset the effects of Apple’s stock split.

Apple’s huge gains this year helped add more than 1,400 points to the Dow Jones, analysts at Bespoke Investment Group said in a recent research note. With the company’s weight falling from 12.1% to just under 3%, however, the Dow Jones is poised to reap fewer benefits in the future.

“Stock splits can be meaningless in terms of a company’s fundamentals, but for a price-weighted index like the DJIA, they can have a big impact,” Bespoke said. “That and the fact that the index only has 30 components is one of the main reasons why a lot less money is pegged to the Dow than the S&P 500.”

Utz Potato Chips makes public debut

The company that makes Utz crisps and Zapp’s Cajun kettle crisps has spent 99 years as a family business. Now it’s going public, using the same strategy as Virgin Galactic and Lordstown Motors.

The details: Shares of Utz Brands – owner of snacks such as Golden Flake, Tim’s and Boulder Canyon – are expected to start trading on the New York Stock Exchange on Monday under the symbol “UTZ,” reports my CNN Business colleague Alicia Wallace .

To get there, Utz merged with Collier Creek Holdings, a special purpose “blank check” acquisition company, or SPAC, formed in 2018 by former executives of Pinnacle Foods and Kraft.

The big picture: PSPCs have gained attention as the method of choice for electric car makers like Nikola and other hot companies like DraftKings. Now their appeal is widening.

Billionaire Bill Ackman recently launched a SPAC called Pershing Square Tontine Holdings which went public with the aim of raising a billion dollar startup. Even Billy Beane, the baseball statistics specialist played by Brad Pitt in “Moneyball,” has a company called RedBird Acquisition that went public as PSPC in order to purchase a sports franchise.


Video zoom (ZM) reports results after US markets close.

Coming tomorrow: The August reading of the ISM Manufacturing Index, a closely watched indicator of US industry.


Please enter your comment!
Please enter your name here