TikTok owner ByteDance has no plans to go public, company CFO tells employees

ByteDance, the world’s most valuable unicorn, has no plans to go public, its chief financial officer told employees in an internal meeting
The Chinese tech firm’s new share option programme sets the grant price at US$155 per share, a 20 per cent discount to last year’s plan

ByteDance

Coco Fengin Beijing

Published: 6:00pm, 2 Sep 2022

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TikTok’s parent company ByteDance, the world’s most valuable unicorn, has no plans to go public, its chief financial officer told employees in an internal staff meeting on Wednesday.

Julie Gao, who joined the Chinese giant in April from international law firm Skadden, Arps, Slate, Meagher & Flom, made the announcement in an online meeting together with ByteDance CEO Liang Rubo, TikTok CEO Shou Zi Chew and several other executives, according to two people with knowledge of the matter.

Liang also said that many of the firm’s businesses failed to meet expectations and the company planned to reduce input into noncore businesses, according to a report by Chinese tech media outlet LatePost, which first confirmed the news.

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Beijing-based ByteDance, founded by entrepreneur Zhang Yiming a decade ago, is the largest Chinese consumer tech firm to remain private. Its shareholding employees are in line for a windfall should the company go public.

The unicorn – which is backed by venture capitalists Sequoia Capital, General Atlantic and Hillhouse Capital Group – also denied in a statement in April 2021 that it had any immediate plans for an initial public offering.

ByteDance told employees in an email on Wednesday the firm would be offering stock options at US$155 per share, according to a report by Chinese media outlet The Paper. The price is about 20 per cent lower than the US$195 offered last year.

The company is also reportedly preparing to offer unvested options priced at over US$155 per share to about 30,000 of its 110,000 employees.

ByteDance declined to comment on Friday.

With its IPO plan still up in the air amid regulatory changes and economic uncertainty, ByteDance has been offering share buy-back programmes twice a year since 2017, allowing employees to cash out their options.

The company, which also operates TikTok’s sister app Douyin in China, was valued at US$400 billion at its peak, although that number has since dropped to around US$300 billion as growth prospects dimmed.

ByteDance’s headquarters in Beijing, China. Photo: Shutterstock

Last year, Zhang announced he was stepping down as CEO and handed over the firm’s daily management to his university roommate and co-founder Liang. The company also conducted a corporate reshuffle to organise its sprawling businesses into six segments.

Under Liang, the company has implemented a campaign to “strengthen muscle and reduce fat”, increasing investment in profitable businesses while scaling back loss-making operations.

After China banned for-profit tutoring for schoolchildren last summer, ByteDance significantly trimmed its education business and doubled down on healthcare.

It recently made its biggest investment into the sector through the purchase of Amcare Healthcare, China’s largest private hospital chain specialising in obstetrics and gynaecology. Analysts have said the deal could elevate ByteDance’s position in the online healthcare market.

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