Shares of Microsoft Corp. (MSFT) are up 4% in morning trading Monday after the company confirmed it would continue talks about a potential purchase of TikTok's U.S. operations. President Donald Trump threatened to ban the app from the U.S. on national security concerns before reports emerged late last week that Microsoft was interested in possibly buying TikTok's U.S. operations from China's ByteDance. Evercore ISI analyst Kirk Materne wrote that he isn't completely sold on the logic of a deal from the perspective of Microsoft's stock. "Overall, we acknowledge that TikTok could open up a much bigger [total addressable market] for Microsoft in the advertising market, but the consumer market is fickle and we believe that Microsoft needs to make sure that a potential acquisition of TikTok (<1% of revenue) does not overshadow the Commercial Cloud narrative that has powered Microsoft shares higher over the past five years," he wrote. Microsoft shares have gained 22% over the past three months as the S&P 500 has risen 16%. The Dow Jones Industrial Average , of which Microsoft is a component, is up 12% in that span.
-Emily Bary; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
August 03, 2020 09:57 ET (13:57 GMT)
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