ByteDance Plans Share Buy-Back As IPO Stalls

A share buy-back planned by Chinese social media giant ByteDance values the private company at $300 billion (£263bn), a significant drop from its peak of $400bn last year but still making it the world’s most valuable start-ups.

Last year ByteDance was reportedly planning a public offering in New York or Hong Kong, but those plans have been shelved, the company’s chief financial officer Julie Gao told employees earlier this month.

ByteDance has set aside $3bn in cash to repurchase shares from existing shareholders at a price of up to $176.94, according to a memo sent to investors that was widely reported.

Liquidity

The move is intended to give liquidity to long-term shareholders such as Sequoia Capital and Susquehanna International Group in the absence of a near-term IPO, according to people familiar with the plans who commented to several news agencies.

ByteDance is also extending its existing staff stock-incentive plan for another 10 years, according to the memo.

The firm’s board has approved the plan and it will be put to shareholders at the end of this month, according to reports.

ByteDance reportedly intends to complete the repurchase in the next two to three months.

Data concerns

Amidst rapid expansion ByteDance has been struggling with a regulatory crackdown on China’s tech sector as well as suspicion from US lawmakers over how the firm handles US user data.

Last week TikTok chief operating officer Vanessa Pappas testified before the US Senate, telling the hearing TikTok is committed to the data security of its US users and is working on a deal with the US government to safeguard the information.

At an all-hands ByteDance meeting last month TikTok chief executive Shoul Zi Chew reportedly told employees one of the highest priorities for TikTok is to earn trust, though the process will be long.