ByteDance’s higher valuation reflects resilience amid upcoming US divestment of TikTok
ByteDance has conducted employee share buy-backs since 2017, reinforcing internal confidence in the company’s long-term growth prospects
TikTok owner ByteDance has initiated a new round of employee share buy-backs that give the company a higher valuation, even as it works on a deal to divest the video app’s US operations amid geopolitical uncertainty.
For former employees, the price was US$180.37 per share, almost 12 per cent higher than the last round’s US$161.42. This offer narrowed the gap between the two groups, as previous buy-back programmes typically offered former employees 20 per cent less than the price available to current staff.
The company did not immediately respond to a request for comment on Monday.
The new repurchase price suggests that ByteDance’s management does not see the TikTok deal as a big blow to the company’s valuation, which was estimated to be about US$330 billion based on the purchase price, supporting speculation that the company would continue to gain financially from US TikTok operations as a joint venture.
“The share repurchase price [for employees] may serve as a significant reference point for company valuation,” said Guo Tao, a Beijing-based angel investor and expert in artificial intelligence. “However, the actual valuation requires a multidimensional assessment taking into account market conditions, profitability, growth prospects, among others.”