(Reuters) – ByteDance is acquiring shares back from U.S. employees in a transaction that values the TikTok parent company at $223.5 billion, a decrease of approximately 26% compared to its valuation in a similar deal a year ago, as reported by the Information on Monday.
According to two individuals with direct knowledge of the matter, the company is seeking to purchase a minimum of $300 million worth of stock from current and former U.S. employees.
ByteDance did not respond to a Reuters request for comment outside of regular business hours.
Unsustainable spikes in private investment market valuations during the pandemic-era exuberance of 2020 and 2021, fueled by accommodative monetary policies and easy capital, have forced numerous startups to accept lower valuations.
This deal arises at a time when TikTok, the short video app owned by ByteDance, is facing increasing calls for a nationwide ban from certain U.S. lawmakers due to concerns about potential influence from the Chinese government. ByteDance has refuted these allegations.
In March, TikTok CEO Shou Zi Chew faced questioning in a congressional hearing where lawmakers expressed worries about the platform’s impact on children’s mental health, highlighting bipartisan concerns over the app’s control over American users.
In unrelated news, the Wall Street Journal disclosed on Monday that ByteDance recorded an operating profit of nearly $6 billion in the first quarter of 2023, nearly doubling its performance from the previous year.
(Reporting by Niket Nishant and Samrhitha Arunasalam in Bengaluru; Editing by Shinjini Ganguli)
Credit: The Star : Tech Feed
