At least three of Bytedance’s major investors have marked up the TikTok-owner’s valuation to more than US$400 billion (HK$3.12 trillion), a sharp rebound for a Chinese social video leader that has been threatened with a US shutdown.
SoftBank Group’s Vision Fund revalued the company to north of US$400 billion in December, factoring in potential for its artificial-intelligence business Doubao, according to people familiar with the matter. Investing giants Fidelity Investments and T. Rowe Price have also marked up ByteDance, valuing it at above US$410 billion and US$450 billion, respectively, according to Bloomberg calculations based on November filings to the US Securities and Exchange Commission.
SoftBank’s methodology puts zero value on TikTok’s US operations, because the popular video app was supposed to be shut down in the country. If the business escapes such a fate, that would clear the way for more upside in ByteDance’s valuation, said one of the people, who asked not to be named as the information isn’t public. The decision to revalue ByteDance is also based on strong revenue growth last year.
SoftBank declined to comment, while a representative for ByteDance didn’t respond to an emailed inquiry. Fidelity said the firm doesn’t comment on individual companies or Fidelity funds’ investment decisions. A representative for T. Rowe Price said the firm does not comment on valuations of private companies in which it invests, while “valuation activities are separate and independent from investment management.”
The valuation marks a substantial increase for ByteDance whose stock exchanged hands at a low point of US$275 billion in July 2022. A renewed rally in Chinese tech stocks driven by AI startup DeepSeek and Beijing’s perceived softer stance on the once-battered sector also bode well for the stock.
ByteDance’s stock has always been exposed to geopolitical uncertainties surrounding the US and China. There were investors still seeking to buy the stock at a price that puts the company’s value as low as US$240 billion, even though few sellers would come forward at that price now, according to two people involved in such bids.
For ByteDance’s annual share buyback last year, the offer price was set at US$180 per share, which represents US$300 billion in value, according to another person familiar with the matter. This is an increase from the US$268 billion valuation applied for buybacks in 2023.
While many people are focused on the geopolitical risks facing TikTok’s US business, ByteDance’s strength lies in it being an AI leader in China, which is under appreciated, one of the people said. Its AI chatbot Doubao has 75 million regular active users, while the company touts its earlier vision understanding model as 85 percent cheaper than the industry average price, resembling DeepSeek.
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A view shows the office of TikTok, in Culver City, California, March 13, 2024. REUTERS
