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ByteDance, Owner of TikTok set to buy back shares after amassing $50 billion cash pile

ByteDance, Owner of TikTok set to buy back shares after amassing $50 billion cash pile

TikTok owner, ByteDance is tapping a cash pile of more than $50 billion accumulated from its popular short-video apps to buy back up to $5 billion worth of shares from investors.

The owner of the viral apps TikTok and Chinese version Douyin raked in $29 billion in revenues in the three months to June, up about 40% from the previous year, according to four people briefed on the figures.

According to a Financial Times report, ByteDance, the Chinese social media company, recorded earnings before interest and tax (EBIT) at $9 billion, its preferred profitability metric. As of mid-year, ByteDance held $51 billion in cash on its balance sheet, with $7 billion restricted and unavailable for immediate business use. The total debt was reported at $12 billion.

ByteDance, founded by Zhang Yiming in 2012, has been one of the fastest-growing companies from China, boasting over 3 billion monthly active users across its platforms, including Douyin and TikTok. During the second quarter, 2 billion users logged in daily. In comparison, Meta, the owner of Facebook, Instagram, and WhatsApp, had just under 4 billion monthly active users, with 3 billion using its platforms daily during the same period.

Despite its rapid growth, ByteDance has faced challenges, including a regulatory crackdown by Beijing on the internet sector and political scrutiny in Washington. The company aims to purchase shares from investors at an estimated $260 billion valuation, down from its $300 billion valuation in a share buyback last summer. ByteDance has postponed its intended Hong Kong listing multiple times due to regulatory changes.

ByteDance’s aggressive push into e-commerce in China, leveraging Douyin’s popularity, poses a challenge to incumbent Alibaba. The company is also investing in expanding TikTok’s international e-commerce business. Although ByteDance does not publicly disclose its revenue and profitability figures, it has faced uncertainty about its ability to conduct an IPO, along with Ant Group.

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