Exclusive | TikTok owner ByteDance approves US$3 billion share buy-back, its first for investors, despite some opposition

At a meeting on Tuesday, ByteDance approved the board’s decision to repurchase shares, which small shareholders opposed over its lower company valuation
The decision marks the first time ByteDance has offered a buy-back plan to investors, as the company maintains that it still has no plans to go public

ByteDance

Zhou Xinin Hong KongandCoco Fengin Beijing

Published: 1:30pm, 27 Sep, 2022

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ByteDance, the owner of TikTok, concluded a special shareholder meeting on Tuesday morning at which the company endorsed a board decision to repurchase up to US$3 billion shares from investors despite opposition from some small shareholders, according to a source who was briefed on the meeting.

While the company’s offer of US$177 per share would give ByteDance a valuation of US$300 billion, placing it among China’s biggest tech giants with a valuation greater than that of Alibaba Group Holding, a number of small investors are unhappy with the price, which is about a quarter lower than its peak price a year ago, the source, who declined to be named because the information is private, told the South China Morning Post. Alibaba owns the Post.

ByteDance did not immediately respond to a request for comment.

ByteDance sees valuation drop a quarter to US$300 billion after latest share buy-back

The meeting was completely conducted in English “without translation”, with more than 100 delegates in attendance. ByteDance’s Hong Kong and Singapore offices were open today for investors to sit in, but most chose to dial into the conference remotely using Lark, the company’s business conferencing and collaboration tool.

Julie Gao, who was appointed as the new chief financial officer in April, chaired the meeting, the source said.

Approval of the board’s decision marks the first time that ByteDance has offered a share repurchase to investors.

After years of rumours about an initial public offering, plans to list remain up in the air amid a dour market for tech stocks. Gao this month reiterated previous ByteDance statements that the company has no plans to go public.

Even at a reduced valuation, ByteDance remains China’s most valuable private company. Douyin, the Chinese version of TikTok, has 600 million daily active users, from whom ByteDance profits through advertising, e-commerce and other services.

06:02

Global expansion of TikTok and other Chinese tech companies is likely, only not in the West

TikTok, which is not available in China, also remains extremely popular overseas with more than 1 billion users. This is despite increased political scrutiny amid fears in the US and other Western countries that its Beijing-based owner is beholden to laws that could require it to hand over sensitive user data to the Chinese government, which the company has repeatedly denied ever doing.

Former US President Donald Trump tried to force ByteDance to sell the platform to American investors in 2020, but the plan did not pan out after the Chinese government indirectly intervened by requiring approval for the export of sensitive technology, which includes algorithms like the one at the centre of TikTok’s viral popularity.

The Biden administration and TikTok have drafted a preliminary deal to resolve national security concerns, but the deal faces hurdles as TikTok tries to maintain its ownership structure, The New York Times reported on Monday, citing four unidentified sources.

The Tuesday shareholder meeting did not address issues that were not on the agenda, the source told the Post.

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