Bytedance, owner of the application of Short Videos Tiktok, prepares to launch a new repurchase of employee shares that will assess the Chinese technological giant in more than 330 billion dollars, driven by the continuous growth of their income, three people said with knowledge of the matter.
The company plans to offer current employees $ 200.41 per share in the repurchase program, people said, an increase of 5.5% compared to the 189.90 dollars offered by about six months ago, which valued Bytedance at approximately 315 billion dollars. The repurchase is expected to start in autumn.
The last repurchase to a higher assessment will occur as Bytedance consolidates its position as the world’s largest social media company for income, with an increase of 25% year after year in their income from the second quarter, sources said.
That growth caused the company’s income in the second quarter to reach approximately 48 billion dollars, the majority from the Chinese market, while the company continues to face political pressure to sell its US subsidiary.
The revised assessment and the details of the income growth of the second quarter had not been previously published. The sources requested anonymity for not being authorized to comment on the information with the media. Bytedance did not respond immediately to a comment request.
In the first quarter, Bytedance’s revenues increased to more than 43 billion dollars, which made it the number one social media company in the world in sales, surpassing the goal, owner of Facebook and Instagram, which reported 42 thousand 300 million dollars in that period.
Both firms maintained a sales growth above 20% in the second quarter, driven by a solid advertising demand.
Bytedance’s semiannual repurchases allow private company employees to withdraw some of their holdings and reflect a balance strengthened by their expanding national and international businesses.
It is increasingly common that private companies in advanced stages carry out periodic repurchases to retain and provide liquidity to employees without resorting to an initial public offer.
Many, such as Spacex and OpenAi, use external investors capital to finance these programs. Bytedance has been an exception, constantly using its own balance, which demonstrates financial flexibility and healthy margins.
Bytedance is also widely considered one of China’s artificial intelligence leaders, having invested billions of dollars in the purchase of Nvidia chips, in the construction of infrastructure related to AI and in the development of their models.
Find: with the prohibition of Tiktok in pause, bytedance silently launches AI apps
Venta of TykThot
Despite exceeding the goal in income this year, the Bytedance assessment remains less than a fifth of the market capitalization of approximately 1.9 billion dollars of the finish line, a gap that analysts attribute mainly to the political and regulatory risks in the US.
Bytedance faces intense pressure in Washington, where legislators have expressed national security concerns for their Chinese property.
Last year, Congress approved a law that demands that Bytedance falls apart from Tiktok US assets before January 19, 2025, or faces a national prohibition of the application, which has 170 million US users.
President Donald Trump has granted Tiktok multiple extensions and last week he extended the deadline for the company to get rid of its US assets until September 17, indicating that US buyers were aligned for Tiktok and that the deadline could be delayed again.
Some legislators have criticized the delay, arguing that their administration is violating the law and ignoring national security concerns related to Chinese control over Tiktok.
Bytedance is profitable as a company, but Tiktok’s business in the United States has been deficient to date, according to two of the sources. Tiktok did not respond to a request for Reuters comments.
If the sale of the American Tiktok business is specified, it is expected that it will become the property of a joint company formed by a consortium of US investors and Bytedonce, which will maintain a minority participation.
The consortium, which has emerged as a favorite, includes the current Shareholders of Bytedance, Susquehanna International Group, General Atlantic and KKR, as well as Andreessen Horowitz, Reuters reported previously. Blackstone recently retired from the Consortium after several delays in the agreement schedule.
The new Bytedance repurchase could help reinforce the morals of its personnel based in the United States, some of which are concerned about Tiktok’s uncertain future.
Tiktok has also been working on the preparation of a possible independent application for American users, sources told Reuters previously, although it is not clear if a contingency plan will be finished in the midst of the current Trump’s commercial conversations with Beijing.
Continue reading: Trump says he could extend Tiktok’s sale period after joining the app
With Reuters information
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