TikTok’s parent company, ByteDance, would have made an operating profit of almost $6 billion in the first quarter of 2023 alone. Double compared to the previous year, mainly thanks to a reduction in expenses by the Chinese giant. It’s not often you get to look at the accounts of TikTok’s holding company. But both the Wall Street Journal and The Inormation did so, reporting how ByteDance would revive its business from 2021, when it recorded an operating loss of $7 billion.
ByteDance wants to buy back shares from employees. Rating -26%
However, while ByteDance’s revenue continues to expand, surging more than 38% to $85.2 billion in 2022, the company’s revenue growth has slowed compared to the previous year. At that time it had increased by almost 80%. Last year, however, the company generated operating profit of more than $20 billion.
According to the Wall Street Journal, ByteDance also offered to buy back shares from current employees at $160 per share. The company also notes that it has 1.4 billion shares outstanding, implying a valuation of $223.5 billion. This is a drop of almost 26% compared to the 300 billion dollars a year ago, the latest data shared, also reported by the American financial newspaper.
“We can confidently say that the company continues to grow,” a ByteDance spokeswoman said after reading the press reports. The company, according to published documents, is healthy. Growing in volumes and turnover. It makes huge expenditures on marketing and research. With the aim of staying there, at the top of social media in terms of number of new users, popularity among the new generations.
Expansion in the USA. But problems with Beijing are feared
ByteDance launched an e-commerce site in the United States in August: TikTok Shop. The hope is to increase revenue. But also to focus on the American market and convince its investors that the geopolitical uncertainties between the USA and China are not a problem. But the company is still trying to convince US authorities and regulators in other countries that its video-sharing app TikTok is safe for users.
Regulators have expressed fears that the Chinese government could pressure TikTok to obtain data on its users or use the app to spread propaganda, speculation that TikTok has repeatedly denied. In short. A mission that could prove more complex than expected.