Amazon (AMZN) unexpectedly threw its hat into the ring today to acquire popular video-sharing app TikTok. Unlike other major tech stocks that wobbled on Wednesday ahead of Trump’s tariff announcement, Amazon’s stock closed the day 2 percent higher on the news.
Amazon has approached U.S. Vice President JD Vance and Commerce Secretary Howard Lutnick about its offer, The New York Times first reported. How much Amazon is willing to pay to acquire TikTok wasn’t disclosed and sources indicate that officials aren’t taking the bid seriously.
The news comes just days before the April 5 deadline for TikTok, used by 170 million Americans, to separate from its Chinese owner, ByteDance, or else face a shutdown in the United States. While President Donald Trump has suggested he may extend the deadline, negotiations are still intensifying.
If Amazon succeeds, the deal could accelerate the company’s push into social commerce, an area where a previous attempt was recently canceled.
For investors, the bigger question is whether Amazon’s sudden interest in TikTok is a long-term strategic move for the company.
What’s driving Amazon’s interest in TikTok?
TikTok has become an e-commerce powerhouse, with influencers driving billions in sales through affiliate links — many of which route to Amazon.
TikTok’s short-form videos have proven to be an incredibly effective marketing tool. Amazon launched a TikTok-style shopping feature called Inspire in late 2022, but it failed to gain traction. Amazon quietly scrapped the feature in February.
Buying TikTok would give Amazon instant access to the social commerce market. It would also put Amazon on the same playing field as other mega tech companies like Meta (META), owner of Facebook and Instagram, and Microsoft (MSFT), owner of LinkedIn.
Who else wants TikTok?
Amazon’s surprise bid comes amid a flurry of activity from other interested buyers, including Oracle, Andreessen Horowitz, Blackstone and even a consortium backed by social media influencers like MrBeast.
Some appear to have a better shot than others.
For example, Oracle, which already hosts TikTok’s U.S. data, is leading a bid backed by venture capital giant Andreessen Horowitz. Oracle’s chairman, Larry Ellison, has close ties to Trump, which could give this bid an edge.
With such a crowded field, Amazon’s bid appears to be a long shot — especially given its lack of prior involvement in negotiations.
The more likely outcome may be that a new, independent global TikTok company is formed and ByteDance shares held by U.S. investors are transferred there, according to reports.
Trump’s role and the tariff factor
Trump, who initially pushed for a TikTok ban in 2020, has softened his stance in recent months, recognizing the app’s influence over young voters.
Trump has insisted a deal will be finalized before the April 5 deadline, but a bigger story dominated the markets Wednesday — a new baseline 10 percent tariff on all imports and higher tariffs on imports from China, Japan, Taiwan, South Korea and the European Union.
For Amazon investors, Trump’s tariff plans could have a significant impact on the company’s earnings and profits. Any shift in U.S.-China trade policy could disrupt Amazon’s supply chain.
Reports suggest Trump may use tariffs as leverage, potentially offering to ease trade restrictions in exchange for Beijing’s approval of a TikTok sale. However, any deal would require Chinese government approval first.
What this means for investors
On Wednesday, Amazon’s bid for TikTok helped nudge the stock 2 percent higher by the close, even as other major tech stocks like Apple (AAPL) and Meta dipped. Amazon is down more than 10 percent year to date.
For long-term investors, there’s a lot of uncertainty in the air, especially amid broader market turmoil.
If Amazon were to acquire TikTok, it could transform the e-commerce landscape. However, if negotiations collapse and a TikTok ban is enforced, it could send shockwaves throughout the tech sector.
Regardless, Amazon’s willingness to make such a dramatic move suggests it sees social commerce as a major growth area.
With just days left before the deadline, the TikTok saga is still unfolding. Investors should brace for volatility as the market prices in the impact of Trump’s tariff decision and the aftermath of a potential TikTok sale over the weekend.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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