Media: ByteDance postponed the IPO until the end of 2022. The position of the Chinese authorities is to blame for everything
The Chinese giant ByteDance will not appear on the stock exchange until at least the end of 2022. According to the SCMP portal, TikTok‘s parent company has decided to wait until the new rules for regulating cyberspace are approved in China. Against the background of rumors, the largest shareholders of ByteDance began to get rid of their shares.
Photo: Reuters
This was reported to SCMP by three people closely familiar with the issue.
According to one of the sources, ByteDance doubts that it will receive the approval of the authorities about the IPO before the 20th Congress of the Communist Party. This congress is scheduled for next fall. It is possible that new regulations that concern the Internet giant will be discussed at it.
The company’s doubts are connected with the recent actions of the Chinese government — officials have begun to pay more attention to the technology segment and restrain the growth of individual companies. In particular, the authorities proposed to ban all firms that have access to the data of over a million Chinese users from conducting an IPO in the United States.
Another source also noted that the authorities themselves advised ByteDance “not to rush” to enter the stock exchange.
After the internet started talking about the possible postponement of the IPO, the American trading company Susquehanna International Group (SIG) announced that it would sell its stake in ByteDance. She owns shares worth $500 million. Another major shareholder (his name is not specified) recently sold shares worth about $360-370 million. Also in October, the company’s shares began to trade more actively on Chinese platforms like 36Kr.
Now ByteDance is estimated at about $400 billion. According to the Bloomberg business portal, back in August, the giant’s capitalization was $ 450 billion, and in July — $ 500 billion.
ByteDance has already commented on the information about the postponement of the IPO. In a statement to SCMP, she said that she does not plan to enter the stock exchange at all: neither now nor at the end of 2022.
Rumors that ByteDance is preparing to become a public company have been going on for three years. This year alone, the IPO was discussed twice: in April and August. Then it was reported that ByteDance is negotiating a listing on the Hong Kong Stock Exchange. However, after the Chinese government appointed its own person to the board of directors of ByteDance, rumors about entering the stock exchange began to decline.
ByteDance generally tries to follow the course of the Chinese authorities. For example, last Friday it became known that the company carried out large—scale cuts in Ohayoo – a subsidiary engaged in the publication of mobile games. The company did not comment on this information, but it is assumed that about a hundred employees were dismissed. This happened against the backdrop of growing government dissatisfaction with video games.
