ByteDance, the owner of the video-sharing app TikTok, was founded in 2012. Does ByteDance have publicly traded shares? Can you invest in ByteDance shares? In this article, we will talk about ByteDance stock and how to invest in ByteDance.
Also Read: Throwback Trading on Stock Market
- How Did ByteDance Come About?
- What Are ByteDance’s Most Important Products?
- Why TikTok Owner ByteDance Stock Increases?
- Has the Initial Public Offering (IPO) of ByteDance been made?
How Did ByteDance Come About?
Zhang Yiming has become a huge success in the business world by founding TikTok. According to the Forbes Billionaires List, he is now worth more than $49.5 billion, making him the 22nd richest person in the world. He is the TikTok owner ByteDance and the world’s largest startup, and has offered various social networks, music, and media products.
ByteDance was founded in 2012 and was initially based in a small apartment. The company launched Toutiao, which remains one of ByteDance’s flagship products, later that year. This application quickly gained attention and reached 1 million daily active users only 4 months after its launch.
One of the factors that helped fuel ByteDance’s growth was the massive IPO of Chinese company Alibaba in 2014. When Alibaba was listed on the New York Stock Exchange with a valuation of $25 billion, more international investors announced their readiness to invest in products and services from the Chinese market.
Since 2014, the company has received billions of dollars in public investment in the form of venture capital. This huge capital fund has helped ByteDance to compete with Baidu, Alibaba, and Tencent (BAT) in various aspects.
What Are ByteDance’s Most Important Products?
The popular application TikTok is considered ByteDance’s best-known asset, especially in the international arena. But the company is working on offering a large and rapidly expanding portfolio of products that spans major segments of the modern Internet economy, from news gathering and browsing to music and mobile gaming.
Each ByteDance product is designed according to the company’s specific mechanism and customization. Also, similar to the algorithms used in Facebook and YouTube, the TikTok algorithm analyzes the user’s interaction with the videos and uses that data to suggest additional content platforms to keep the user engaged. In addition, user-generated content platforms encourage people to create more content and thus spend more time on the app.
The result is an engaging user experience that keeps users on the app for a long time (in the case of TikTok, it’s an average of 52 minutes per day). This amount of engagement puts TikTok alongside Instagram (53 minutes) and Snapchat (50 minutes) and is significantly higher than YouTube (40 minutes).
According to Statista, in the United States, TikTok is the sixth most popular social app, ahead of Facebook Messenger, Snapchat, and Twitter, but still behind Facebook and Instagram. Also, the quarantines imposed as a result of the start of the pandemic accelerated the growth process of TikTok.
Until now, ByteDance has made most of its money through advertising and in-app purchases. ByteDance’s personalized advertising algorithm is such that this company’s share in the advertising market has quadrupled in just 2 years (from 5% in 2017 to about 30% in 2021).
Why TikTok Owner ByteDance Stock Increases?
ByteDance, the world’s most valuable startup, has experienced unprecedented growth in just 10 years. ByteDance will have $58 billion in revenue in 2021, with 1.9 billion monthly active users in 150 countries. TikTok short videos have been downloaded more than 3 billion times worldwide.
But ByteDance has produced other successful products. Toutiao, China’s most popular news app, which today has 320 million monthly active users, and Douyin, a short video app that predates TikTok, account for 20% and 60% of the company’s total ad revenue, respectively.
According to recent estimates, ByteDance is worth $300 billion based on the company’s latest share buyback. Bloomberg reported that the app could triple its revenue by 2022, while TikTok’s revenue for 2019 reached more than $17 billion with $3 billion in net profit. According to Bloomberg, TikTok generated nearly $4 billion in revenue in 2021 and is expected to reach $12 billion in 2022.
Has the Initial Public Offering (IPO) of ByteDance been made?
ByteDance is not a public company, which means that ByteDance is not listed on the stock options exchange to date, and investors cannot buy its shares directly. Instead, ByteDance investors can invest indirectly in its shares.
Therefore, despite a valuation of 250 billion dollars, ByteDance is private, but if ByteDance IPO takes place, every person familiar with the stock can decide on their investment in ByteDance. Kohlberg Kravis Roberts, SoftBank Group, Sequoia Capital, General Atlantic, and Hillhouse Capital Group are major shareholders of ByteDance.
Sequoia Capital, General Atlantic, and Hillhouse Capital Group are private companies, and investors cannot invest in them. So if investors want to own ByteDance stocks, they can buy shares of Kohlberg Kravis Roberts (KKR) or SoftBank (SFTBY) Group. Both private equity firms have a full portfolio of investments, of which ByteDance is one.
TikTok still has a long way to go to compete with companies like Apple. However, user penetration and in-app revenue show strong and consistent gains for the app. Many investors are ready to buy shares offered in the company’s IPO. However, it needs to be clarified whether TikTok (or ByteDance) will become a public company through an IPO.
Can I Invest in ByteDance?
ByteDance is not a public company. So you can’t trade ByteDance on the New York Stock Exchange.
How Do I Invest in ByteDance Stock?
One cannot directly buy ByteDance stock as a retail investor. However, investors can indirectly invest in ByteDance by purchasing shares of ByteDance holding companies.
Has the IPO of ByteDance Taken Place?
No. If ByteDance’s IPO takes place, you can decide on your investment in ByteDance.
Is the IPO of ByteDance Coming Soon?
SoftBank, a well-known investment company, is willing to invest in ByteDance’s IPO. Therefore, it is expected that ByteDance’s IPO will take place soon.
Who is the Chief Executive Officer (CEO) of the ByteDance?
ByteDance’s chief executive, Liang Rubo, who was Mr. Zhang’s college roommate, is the CEO of ByteDance.
Is TikTok Owned by ByteDance?
TikTok, which ByteDance owns, is used by over 1 billion people worldwide.