ByteDance has initiated formal procedures for an initial public offering (IPO) in the Hong Kong Stock Exchange after submitting a letter with details regarding potential underwriters to trade authorities, according to a Wednesday report by the China Securities Journal.
Individuals with knowledge on the matter cited by South China Morning Post have also revealed that company will implement a stock-option plan in which its own employees can trade salary bonuses for shares of the company’s stock at $126 apiece.
Estimates of ByteDance’s valuation amidst speculation of an impending public listing have reached the staggering sum of $400 billion, making the technology juggernaut the world’s highest-valued privately held startup.
The Beijing-based firm has experienced a windfall of investment over the past year, spurred in part by the continuing international success of its short video app TikTok and an immensely successful Series C investment round that concluded in March 2020.
The company had previously considered the option of listing some of its individual products in a range of domestic and offshore markets, including the popular short video app Douyin – essentially the Chinese mainland version of TikTok – and news aggregator Toutiao. Douyin’s major rival Kuaishou in February completed its $5.3 billion IPO.
The possibility of ByteDance’s IPO in Hong Kong, while perhaps not coming as a surprise to investors, will nonetheless spark enhanced interest in the company as it continues to engage in attempts to expand its operations globally.
Established in 2012 by founder Zhang Yiming, ByteDance has soared to the forefront of the digital media and entertainment industry through its pioneering AI and content recommendation technologies.
The company has also been ensnared in various geopolitical disputes, with regulators in countries such as the US and India claiming that the TikTok app’s collection of user data poses a national security threat. While currently banned in India, an order by the Trump administration to do the same in the US remains held up in domestic courts.
ByteDance’s potential listing would represent a continuation the recent trend of prominent international Chinese firms making “homecoming IPOs” in Hong Kong, as well as other onshore exchange markets. The surge has been encouraged by recent developments in the global economy, such as the coronavirus pandemic and a desire to shore up local investment amidst a recovering global economy and stiffer regulation of Chinese tech giants.