2024-11-17 01:20:00
By Echo Wang and Chandni Shah
(Reuters) –TikTok‘s parent company ByteDance is valuing itself at about $300 billion, after it recently approached investors about a share buyback program, according to two people familiar with the matter and a document viewed by Reuters.
ByteDance reached out to investors in recent weeks, offering a price of $180.70 per share, the people said.
The current offer price is an increase of 12.9% from the per share price of $160 in their last buy back program.
The news about the valuation was earlier reported by the Wall Street Journal.
ByteDance did not have any IPO plan in sight, one of the sources said, adding that the buyback program is a way to provide Bytedance with liquidity.
This is the third buy back program for investors from Bytedance, which has been conducting share buybacks since 2022.
The company in Dec 2023 offered to buyback around $5 billion worth of shares from investors at a price of $160 each, which valued the company at $268 billion.
ByteDance had been planning to carry out the buyback program regardless of the outcome of the U.S. presidential election, another source said, declining to be identified.
ByteDance, whose global revenue grew 30% last year to $110 billion, has been facing a legal battle over its U.S. assets.
A law signed by U.S. President Joe Biden on April 24, gives ByteDance until Jan. 19 to sell TikTok or face a ban. The White House has said it wants to see Chinese-based ownership ended on national-security grounds but not a ban on TikTok.
TikTok and ByteDance sued in U.S. federal court in May, seeking to block the law signed by Biden.
Both TikTok and ByteDance declined to comment.
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### Interview with Dr. Alex Chen, Tech Industry Analyst
**Interviewer:** Thank you for joining us today, Dr. Chen. Let’s dive right in. ByteDance has reportedly valued itself at around $300 billion after reaching out to investors about a share buyback program. What are the implications of this valuation for the company and its stakeholders?
**Dr. Chen:** Thanks for having me. ByteDance’s self-valuation of $300 billion indicates a strong position in the market, especially after the recent share price increase to $180.70. This suggests that the company is confident in its growth trajectory and is looking to bolster investor confidence through this buyback program. For stakeholders, it signals a commitment to returning value amidst a fluctuating global economic environment.
**Interviewer:** What do you think is driving this increase in share price from $160 to $180.70?
**Dr. Chen:** The increase can be attributed to several factors: strong financial performance, growing user engagement on TikTok, and perhaps a strategically favorable positioning against regulatory challenges. Additionally, the buyback program itself could be seen as a move to reduce the number of shares in circulation, which often leads to an increase in share value.
**Interviewer:** ByteDance’s valuation comes at a time when many tech companies are facing increased scrutiny and market volatility. How do you see this impacting their operations?
**Dr. Chen:** That’s a great point. While ByteDance is currently showing resilience, external pressures such as regulatory scrutiny and changing consumer sentiments could pose challenges. However, a solid valuation may afford them more room to maneuver—potentially allowing for investments in innovation and market expansion, which could help mitigate risks associated with the tech industry’s volatility.
**Interviewer:** do you think this move could reshape the competitive landscape in tech?
**Dr. Chen:** Absolutely. By solidifying its financial footing through share buybacks and demonstrating investor confidence, ByteDance could set a precedent for other tech firms facing similar circumstances. It sends a message that strategic financial maneuvers can be a viable pathway to maintaining competitive advantage, especially during tough economic times.
**Interviewer:** Thank you, Dr. Chen, for shedding light on this developing story.
**Dr. Chen:** My pleasure!
