Is TikTok owner ByteDance publicly traded yet? What does China’s tech crackdown mean for the company’s IPO plans? So far, the crackdown has impacted ByteDance.
Overall, 2021 was a bad year for U.S.-listed Chinese stocks amid China’s tech crackdown. The prospects of Chinese companies looking to list in the U.S. stalled when China announced the delisting of DiDi from the U.S. markets within months of its listing. TikTok owner ByteDance is another leading Chinese tech company with a global footprint. Is ByteDance publicly traded?
What does China’s tech crackdown mean for ByteDance's IPO plans? So far, the crackdown has impacted the company.
ByteDance isn't publicly traded yet.
Over the last few years, there has been a boom in new listings in the U.S. and globally. The IPO boom, which was led by tech companies, has sparked intermittent rumors that ByteDance is looking to go public.
In 2020, there were reports that ByteDance would partner with Oracle and Walmart and list its global operations in the U.S. in order to escape the ban that Trump was contemplating. The rest, as they say, is history. Trump lost the 2020 U.S. presidential election and the TikTok ban, as well as the IPO plans, were shelved. ByteDance and TikTok aren't publicly traded yet.
Trump says that TikTok will form a $5 billion fund for U.S. education -- and says that's the payment he was seeking.
BUT... We've learned that $5 billion is dependent on TikTik's IPO. As of right now, there is no $5 billion and no fund.
— Dan Primack (@danprimack) September 19, 2020There have been ByteDance IPO rumors.
In 2021, ByteDance was reportedly looking to list offshore, either in the U.S. or Hong Kong. However, it delayed the listing plans amid data security concerns raised by Chinese authorities. In hindsight, that looks like the correct decision. DiDi ignored the concerns raised by Chinese authorities, which led to its eventual delisting.
There were reports that ByteDance would list in early 2022. However, even that timeline might not be met. In October 2021, the South China Morning Post reported that the company’s IPO will be delayed until at least late 2022. If DiDi’s listing was a national security concern for China, TikTok has a lot more data about Chinese citizens than the ride-hailing app.
The ByteDance IPO will face several hurdles.
ByteDance’s U.S. IPO is now almost out of the question. The company might have to eventually list either on the Chinese or the Hong Kong market. However, what complicates the picture for ByteDance is that it would face the fury of both Chinese and U.S. authorities.
While DiDi’s global operations are limited and it didn't have any U.S. citizen data, over 100 million Americans use TikTok. ByteDance’s listing in China might raise national security concerns in the U.S. as well.
Also, China has tightened norms for companies looking to list overseas, including in Hong Kong, which for all practical purposes is fully part of China now.
Bloomberg: ByteDance trading at a valuation of more than $250 billion in secondary market
— Market Rebellion (@MarketRebels) March 30, 2021ByteDance's valuation is above $400 billion.
At a funding round in late 2020, which was led by KKR and Sequoia, ByteDance was valued at $180 billion. The March 2020 funding round valued the company at $140 billion. However, in 2021, the company was valued at upwards of $400 billion in the grey market.
Apart from TikTok, ByteDance owns several other businesses and had a strategic investment arm as well, which it had to close in an apparent bid to please Chinese officials. It owns Douyin, which is the Chinese equivalent of TikTok. The company also owns Toutiao, Xigua Video, Helo, Lark, and BytePlus.
China's most valuable unicorn Bytedance has begun massive layoffs. Based on the current employee number, the layoff can be as high as 7,000 employees.
China's next task is where to stabilize the employment market.
— Shirley Ze Yu (@shirleyzeyu) October 23, 2021ByteDance had to lay off employees from some of the units like the Edtech business and go slow on its growth plans amid China’s tech crackdown. Given the current uncertainty over the regulatory environment in China, ByteDance delayed its listing plans.
Talking of valuations, like DiDi, ByteDance would also face its moment of truth when it goes public. While companies can command exorbitant private market valuations, lately investors have been wary of new tech listings. China's tech crackdown only adds a layer of complexity for ByteDance's listing plans and valuations.
ncG1vNJzZmilkae4psDRnpiloaOpe6S7zGinaKGjYq%2B6wMSdmKeblWK9tq7LopqlsV2pv6KwxJ1m