ByteDance Said to Offer Up to $5 Billion Buyback at $268 Billion Valuation

BEIJING, December 11 (TMTPost)— TikTok parent ByteDance Ltd. is going to make a return to investors at a valuation lower than last year but still far ahead of other Chinese companies, per recent reports.

Credit：Visual China

ByeDance is offering to buy back up to US$5 billion from investors at US$160 per share, which will value the company at around US$268 billion, the South China Morning Post reported. Reuters, CNBC, and Bloomberg later also reported the Chinese internet heavyweight has such repurchase plan with the same valuation.

Reuters’ sources said the recent valuation was about 10% lower than the value a year ago when ByteDance conducted a buyback plan. CNBC’s sources said the buyback has no timetable for completion and the company has asked sharehodlers if they’d like to sign up to the program. While the valuation of US$268 billion is about 11% lower than the price ByteDance offered in September 2022 during a buyback as much as $3 billion, it would still bring the company a third place in China next to Tencent Holdings Ltd. and Kweichow Moutai Co., and among the 40 most valuable public companies in the world, Bloomberg noted.

ByteDance didn’t respond to these reports. The Beijing-based company just announced last month that it would purchase restricted stock units or options from employees for US$160 apiece, valued at the same $US268 billion and higher than the US$155 price it was offering in April. If the latest reports were accurate, the market value gap between ByteDance and Tencent have would be widening.Tencent’s valuation has rebounded since it bottomed out in October 2022 and stablied at around US$400 billion recently.

ByteDance was recently said overtake Tencent by revenues though it had to retreated from the new sectors it has been working these years. ByteDance’s revenue in the second quarter jumped 40% year-over-year (YoY) to US$29 billion, The Information cited people familiar with the figures last month. If the data is accurate, TikTok parent should have delivered a much robust growth and its quarterly sales have overtaken Tencent. Tencent’s revenue rose 11% YoY to RMB149.2 billion (US$20.6 billion) in the quarter ended June 30, missing the Wall Street expectation of RMB152.021 billion.

The report came after ByteDance the same announced layoff and reorganization of Pico, its first attempt to explore the virtual reality (VR), without details such as how many roles will be impacted.”After a careful review of our business, the industry and the market condition, we had some basic judgments as follows: the VR industry is at very early stage, and we previously were relatively more optimistic about the outlook of the industry and market, but the actual development is not as fast as we expected,” Pico CEO Zhou Hongwei said at an internal meeting.

ByteDance confirmed to TMTPost late November that Nuverse, a game developing and publishing brand under the company, will significantly scale down its business, look for divestiture of existing titles with good performance while maintaining operation, and shut down all of unreleased titles except few innovative projects and related technology projects. Nuverse told TMTPost it does have restructure and business adjustments to focus more on some of new types of games and exploration of relevant technologies.

ByteDance and Nuverse didn’t specify how many employees will be affacted during the restructure.A Bloomberg report last month said ByteDance plans to axe several hundreds of jobs in gaming and phase out Nuverse, and it is also weighing sales of Shanghai Moonton Technlogy Co., a studio it took over for US$4 billion in 2021.