TikTok Owner, ByteDance Utilizes $50 Billion Cash Reserve To Repurchase Shares

TikTok Owner, ByteDance Utilizes $50 Billion Cash Reserve To Repurchase Shares

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ByteDance, the powerhouse behind TikTok and Douyin, announced a move to repurchase up to $5 billion worth of shares from investors, drawing from its $50 billion cash reserve.

The company, renowned for its viral short-video apps, witnessed a revenue surge, amassing $29 billion in the three months ending June, marking a 40% increase from the previous year, sources revealed.

It was disclosed that ByteDance’s earnings before interest and tax reached $9 billion, reinforcing its robust financial standing.

By mid-year, the firm held $51 billion in cash, with a portion locked and unavailable for immediate use. However, its total debt amounted to $12 billion, insiders disclosed.

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Backed by General Atlantic and SoftBank, ByteDance aims to repurchase shares at a valuation estimated around $260 billion, a notable drop from its $300 billion valuation during its previous employee-centric buyback last summer.

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Founded in 2012 by Zhang Yiming, ByteDance rapidly ascended as one of China’s fastest-growing companies. Nevertheless, the company faced hurdles amid stringent regulatory measures from Beijing and heightened scrutiny from Washington, impeding its path toward a public offering.

ByteDance had over 3 billion monthly active users across its platforms, with TikTok and Douyin attracting 2 billion daily users in the second quarter.

Comparatively, Meta, the parent company of Facebook, Instagram, and WhatsApp, boasted just under 4 billion monthly active users, with 3 billion daily users on its platforms during the same period in a report by Financial Times

Despite its financial prowess and global user base, ByteDance has been tight-lipped about revenue and profitability figures, declining to comment. Speculations persist regarding its IPO prospects, overshadowing the company’s remarkable sales performance.

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An investor in ByteDance expressed, “The numbers are staggering, but uncertainties loom until the Chinese government greenlights their potential public offering.”

ByteDance’s aggressive foray into e-commerce through Douyin poses a direct challenge to Alibaba in China, while investments to expand TikTok’s international e-commerce presence hint at the company’s ambition beyond its famed video-sharing platform.

The company’s fate remains entwined with regulatory decisions, creating an atmosphere of anticipation and caution within the industry.

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