By Krystal Hu, Julie Zhu and Kane Wu
HONG KONG (Reuters) -ByteDance, the owner of short-video app TikTok, is set to launch a new employee share buyback that will value the Chinese technology giant at more than $330 billion, driven by continued revenue growth, said three people with knowledge of the matter.
The company plans to offer current employees $200.41 per share in the repurchase programme, the people said, up 5.5% from $189.90 each it offered them about six months ago which valued ByteDance at roughly $315 billion.
The buyback is expected to be launched in the autumn.
The latest buyback at a higher valuation will come as ByteDance consolidates its position as the world’s largest social media company by revenue, with its second-quarter revenue up 25% year-on-year, the people said.
That jump resulted in the company’s second-quarter revenue hitting about $48 billion, two of the people said, most of which is from the Chinese market as it continues to face political pressure to divest its U.S. arm.
The revised valuation and the second-quarter revenue growth details had not been reported previously. The sources declined to be named as they were not authorised to discuss the information with media.
ByteDance did not immediately respond to a request for comment.
In the first quarter, ByteDance’s revenue rose to more than $43 billion, making it the world’s No. 1 social media company by sales, topping Facebook and Instagram owner Meta’s $42.3 billion in that period.
Both firms maintained sales growth above 20% in the second quarter, helped by robust advertising demand.
ByteDance’s biannual buybacks allow employees of the privately held company to cash out some holdings and reflect a balance sheet strengthened by its expanding domestic and international businesses.
It is increasingly common for late-stage private companies to conduct regular buybacks to retain and provide liquidity to employees without an exit such as an initial public offering.
Many, including SpaceX and OpenAI, use external investor capital to fund these programmes. ByteDance has been an outlier, steadily using its own balance sheet in a signal of financial flexibility and healthy margins.
ByteDance is also widely regarded as one of China’s artificial intelligence leaders, having invested billions of dollars in buying Nvidia chips, building AI-related infrastructure and developing its models.
TIKTOK SALE
Despite outpacing Meta on revenue this year, ByteDance’s valuation remains less than a fifth of Meta’s roughly $1.9 trillion market capitalisation – a gap analysts attribute largely to political and regulatory risks in the U.S.