After plans for its IPO have cratered, TikTok owner ByteDance is offering to buy back shares from investors.
According to a new report from The Wall Street Journal, ByteDance will spend upwards of $3 billion on the share buyback. The deal values the company at around $300 billion, down from its peak. The WSJ report suggests the repurchase is aimed to give liquidity to long-term shareholders — Sequoia Capital and Susquehanna International Group.
If the $3 billion budget for stock buybacks isn’t enough to buy back all of them, ByteDance will acquire an equal proportion of shares from each. ByteDance has several hundred shareholders. The company is also extending its existing staff stock-incentive plan for another ten years. The board agreed to a plan and will present it to shareholders later this month.
China’s broader crackdown on the technology industry has impacted ByteDance’s operations there. There are also murmurs out of Washington about increasing the scrutiny on how TikTok’s U.S. data is stored and whether or not it flows into China or if Chinese workers have access. A BuzzFeedNews report from earlier this year suggests that at least several high-level Chinese ByteDance engineers have backdoors that can access TikTok data.
ByteDance stopped focusing on its IPO offering since data sharing concerns have been renewed in both the U.S. and Chinese media. ByteDance owns and operates TikTok in the United States, Douyin, and Jinri Toutiao in China. Julie Gao, ByteDance’s Chief Financial Officer, told employees at an event that the company currently has no timeline for going public.
The company was valued at as much as $400 billion in 2021, during the height of the social media boom. Now the company is cutting the price of stock options granted to more than 30,000 employees. The move is designed to help reduce operating costs while retaining staff.