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Is ByteDance Going Public Soon?
ByteDance, the Chinese owner of the social media platform TikTok, is reportedly contemplating going public soon. The Chinese conglomerate is supposed to debut on the Hong Kong exchange either in the fourth quarter of this year or early 2022.
Based on its most recent round of funding, which took place in December 2020, the company’s valuation stands at a whopping $180 billion. The valuation makes it one of the most valuable global startups.
“We are expecting final guidance from ByteDance in September. They are submitting all the filings with Chinese authorities right now and are going through the review process,” the newspaper FT reportedly quoted the source saying. However, it appears that ByteDance denies the claims, saying that the FT report was inaccurate.
Trouble in Paradise
Ever since 1978, when China opened its economy, the country’s economy has grown rapidly. So much so that China is the world’s second-largest economy. However, in recent months, China began what can only be called a crackdown against tech and fintech companies.
Since the beginning of the year, Chinese regulators have shut down all forms of Bitcoin transactions and mining, disrupting what had become a mining empire. Now, they’ve set their eyes on big tech. China is not pleased with the number of Chinese companies that choose to debut on foreign stock exchanges. As a result, they’ve exerted pressure on local companies in the form of regulatory changes and data-collection compliance. This has caused many companies to postpone their planned US IPOs.
Among them was Bytedance, the parent company of the short video platform TikTok, which also owns Chinese TikTok equivalent Duoyin, and news aggregator Toutiao. The company is considered amongst the most successful ones in China.
Bloomberg reported in April that the tech giant had started the initial preparations required for an IPO. However, the IPO of Didi Global Inc. sparked a backlash in Beijing, and Bytedance was caught in the crossfires.
Despite the warnings of Chinese regulators, ride-hailing giant Didi Chuxing proceeded with its US listing, raising $4.4 billion. However, the company is now part of a cybersecurity investigation and has had many of its apps removed from Chinese app stores.
China’s cyberspace and securities regulators instructed ByteDance to focus on resolving its data-security risks and other issues. As a result, ByteDance chose to suspend its foreign IPO plans.
Final Thoughts
ByteDance has not confirmed that it is planning a Hong Kong listing as of yet. However, it does seem to be the next logical step for the tech giant. If they can’t list in the US, where Chinese companies have been known to raise insane profits, the least they can do is debut on the Hong Kong stock exchange.
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