In a recent development, ByteDance, the parent company of the globally renowned app TikTok, is reportedly initiating a buyback of stocks worth at least $300 million from its current and former employees in the United States. This move is expected to result in a 26% drop in the tech giant's valuation.
According to sources cited by The Information, this buyback will reposition the company's valuation at approximately $223.5 billion, marking a significant decline from its valuation during a similar buyback transaction in 2022. For employees who have been with ByteDance for a duration less than two years, the company has proposed a buyback rate of $160 per share. Interestingly, even those who have been laid off by the company are eligible for this offer. The insiders also revealed that both current and former employees are given a deadline until the end of October to inform the company if they wish to sell their shares.
Historically, ByteDance's valuation trajectory has seen some notable fluctuations. In 2022, a buyback program for non-U.S. employees placed the company's valuation at $300 billion, as reported by Reuters. Prior to this, private transactions involving investors such as Tiger Global Management had valued the company at an impressive $400 billion. To provide further context, back in 2020, ByteDance's valuation stood at $180 billion.
The decision to buy back shares comes at a time when ByteDance is navigating through a series of bans imposed on TikTok, specifically on government devices across multiple countries. The U.S., for instance, has been vocal about its concerns regarding the app, with some factions calling for an outright ban. Earlier this year, the White House mandated federal agencies to uninstall TikTok from all government-issued devices within a 30-day window, a directive that was in line with a Congressional order.
European nations have echoed similar sentiments. The European Commission and the EU Council have prohibited the use of TikTok on staff devices. Other countries that have imposed bans or restrictions on TikTok on official devices include Canada, New Zealand, the UK, Australia, Austria, and France. In the U.S., Montana took the lead by becoming the first state to impose a statewide ban on TikTok. This legislation requires tech giants like Apple and Google to delist the app from their respective app stores, with non-compliance resulting in substantial fines.
While ByteDance did not provide an immediate comment on the buyback reports, the company's strategic moves are being closely watched by industry experts and stakeholders, especially given TikTok's expansive global user base and its influence in the realm of social media.
