ByteDance’s latest employee buyback offer higher at US$160 a share
BYTEDANCE has offered to buy back employees’ shares at a price 3 per cent above a previous exercise, aiming to boost morale while conveying confidence about the social media leader’s prospects.
The owner of TikTok and Douyin emailed staff on Wednesday (Nov 8) with an offer to buy back stock at US$160 per share, up from US$155 in the buyback programme seven months earlier, according to a person familiar with the matter, who asked not to be named as the matter is private.
A ByteDance spokesperson confirmed the latest plan but didn’t provide specifics. The move was aimed at providing liquidity and to help motivate employees, the spokesperson said.
Once the darling of global investors, ByteDance is joining a growing list of Chinese Internet companies searching for solutions to restore market confidence and retain talent. Since 2017, the company has held buyback programmes twice per year to eligible current and former employees.
Its short-video platforms, TikTok globally and Douyin at home in China, have disrupted Internet businesses and social media worldwide. Every major service, from Alphabet’s YouTube and Meta Platform’ Instagram to Tencent Holdings’ WeChat, has since introduced short-video services in the vein of TikTok as a response to ByteDance’s incursions.
The private firm grew into the world’s most valuable startup on the strength of its audience-grabbing video apps, but it has also been squeezed by Beijing’s crackdown on Internet companies at home and Washington’s suspicion of its services in the US.
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It’s unclear what valuation ByteDance would command currently. Startup price tags have fallen from their pandemic highs, but in 2022 the Chinese firm offered to buy back shares from investors at a valuation of about US$300 billion.
ByteDance has considered taking TikTok public for years, a move that could both reward investors and ease some political pressure as the unit formally splits from its Chinese parent. ByteDance also contemplated a separate initial public offering for Douyin and its China businesses in Hong Kong. But both debuts have been delayed repeatedly by heightened regulatory scrutiny of large tech firms and a volatile market for tech stocks. BLOOMBERG
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