ByteDance to buy back shares worth $5 million at $160 apiece: Report

ByteDance Ltd., the parent company of popular social video platform TikTok, is offering to buy back up to $5 billion from investors at $160 per share, the same level offered to employees in November, Bloomberg Business reported. This offer represents an 11 percent lower valuation than what ByteDance offered to investors in 2022.

Despite the reduced valuation, ByteDance would still rank among the 40 most valuable public companies globally and the third in China, following Tencent Holdings Ltd. and Kweichow Moutai Co, mentioned the Bloomberg report.

ByteDance has emerged as a major player in China's internet landscape, alongside Tencent and Alibaba, leveraging the success of TikTok to expand into e-commerce and other areas.

However, the company has faced challenges in its forays into gaming and virtual reality, leading to a strategic shift back to its core business, primarily driven by TikTok and its Chinese counterpart Douyin, noted the report.

While ByteDance has been the world's most valuable startup, its plans for a high-profile initial public offering (IPO) have encountered obstacles, including a regulatory crackdown on internet firms in China and increased scrutiny in key overseas markets. TikTok has faced bans in India, once its largest user market, and criticism from U.S. politicians over perceived national security concerns. In Indonesia, as well, TikTok was forced to suspend its burgeoning e-commerce business and is now working on a tie-up with local partner GoTo Group, added Bloomberg.

ByteDance's domestic rivals, such as Tencent and PDD Holdings Inc., have experienced varying degrees of success in recovering from recovering from the crackdown and the economic fallout from Covid Zero policies. Tencent’s stock is today up 5% from a year ago, having returned to growth and adapted to ByteDance’s challenge with the expansion of its WeChat video service. Temu-operator PDD Holdings Inc. has dethroned Alibaba as China’s most valuable e-commerce company for the first time, as its elder rival grapples with a tumultuous reorganization, informed the report.

ByteDance remains unique by having some of the most downloaded apps in both the U.S. and China, with revenue exceeding $80 billion in 2022. The company's strategic withdrawal from the games business has been mitigated by the success of TikTok Shop and on-demand services in China.