Every few years, a new app takes over the social media world. From MySpace, Twitter, and Facebook to Instagram, the social media space has witnessed many changes. As long as the new social media app offers an exciting way to interact with users, it’s bound to draw a crowd. In 2020, TikTok took this space by storm and now has over 800 million users worldwide.
TikTok is owned by a Beijing-based company called ByteDance, founded back in 2012. While TikTok has enjoyed massive popularity, ByteDance is still a privately held company. But when can savvy investors expect the app to become a publicly-traded company?
Let’s explore the phenomenon that is TikTok and its journey to the stock market.
History of TikTok
TikTok took the world by storm in 2020 thanks to its innovative way of social networking. Users have been sharing videos that range from 3 to 15 seconds long, with the content being anything from lipsync comedy to short dance clips. And they’ve been rolling out longer video options, too. You can create and share content, all while interacting with others.
At first glance, TikTok may not be an easy app to understand. However, based on its popularity, it does get addictive once you start using it. Data shows that Tiktok users, mainly 25 years and below, spend at least an hour a day on the app.
ByteDance first launched the app for the Chinese market in 2016, under the name Douyin. However, once it went international in 2017, it was branded TikTok for the overseas market, and ByteDance retained Douyin for the Chinese market. The company runs these two apps on separate servers despite their identical nature in keeping with China’s censorship restrictions.
Shou Zi Chew: Tiktok’s CEO and Bytedance’s CFO
At only 39 years old, the TikTok CEO has an enviable resume. Shou Zi Chew has a degree from Havard Business School and a stint as an intern at Facebook while it was still a startup. He took over leadership of ByteDance, a company estimated to be worth over $400 billion after various careers in the investment world.
Shortly after Shou Zi Chew took on his position as CFO at ByteDance, TikTok’s incumbent CEO stepped down, citing interference from the Trump administration. Three months later, Shou Zi Chew was appointed as TikTok’s CEO alongside his CFO position in the parent company. His job at TikTok is considered “the biggest job in tech” thanks to TikTok’s current growth and popularity.
Shou Zi Chew is a Singaporean national. He was the CFO of Xiaomi, a Chinese multinational electronics company, before joining ByteDAnce as CFO. He also has investment banking experience at Goldman Sachs for two years and at a Russian investment firm for five years before his stint at Xiaomi. At Xiaomi, he took the company through a successful initial public offering (IPO).
All his combined experience arguably makes him the best man for the job. However, Shou Zi Chew has quite the task ahead of him thanks to the never-ending data privacy complications from the US and Chinese governments. Additionally, the speculated TikTok IPO should keep him entirely occupied in both of his roles, a task that he seems to be up to.
Why TikTok Matters
Since its launch outside China in 2017, TikTok has experienced unprecedented growth in a short period, as it became the “most downloaded app of 2020,” according to BBC News.
The growth of TikTok could only be compared to a wildfire with 1 billion global downloads by 2019. TikTok is available in 150 markets in 75 different languages since 2018. And that is not all; this social media app is expected to hit an all-time high of 698 million monthly users across the world over.
Of course, all these stats have drawn a lot of media exposure and attention to the app. TikTok has beaten Facebook, Twitter, and Instagram in all its stats, including revenue of $34.3 billion in 2020.
TikTok Stock Availability
The private Chinese company, ByteDance, owns TikTok. ByteDance’s private status makes TikTok stock unavailable on the stock market. However, ByteDance has received an investment from a notable investment firm, Softbank. The company may likely be in the offing for an IPO soon. The most likely pointer to this is that SoftBank is often keen to invest in successful IPOs, and ByteDance should be no different.
When Will TikTok Go Public?
While it’s not clear whether an IPO is in the offing for Tiktok, there were reports that this would happen in the spring of 2020. However, this did not happen. Another speculation stated that an IPO was slated for April of 2021. This date came and went, and nothing happened on the stock market.
Should there be an IPO, many speculate that Tiktok’s stock will go public in the US while ByteDance stocks will go public in Hong Kong.
TikTok Stock News
As you’ve noticed, there’s been widespread speculation about Tiktok stocks for the past two years. However, due to regulatory issues in the US and China, there is no concrete data to support or corroborate these claims. We can tell that there is bound to be an IPO for such a promising company as TikTok sometime in the future.
It’s critical to note that the unique position of this company that has Tiktok overseas and the mother company in China makes stock market regulations a bit more complicated than usual. Additionally, these two companies are still legally intertwined, making aspects of their business structure ineligible in either country.
Current TikTok Stock Outlook
TikTok is valued at over $50 billion, making it one of the world’s most valuable startups. With such a high market value, it’s no secret that many investors are itching to get a piece of the pie. And with the growth of social media marketing, TikTok’s value is only bound to grow more in the coming years.
Once TikTok’s stock is made public, investors can trade these shares as they would any other stock on the stock market.