The IPO (Initial Public Offering) market has always been interesting to a large number of retail and institutional investors. There is one big reason - profitability.
However, the activity has come to a standstill due to heightened volatility in a rising interest rate environment. One of the most notable projects to be wary of in 2023 is TikTok stock IPO.
In this article we will discuss the key details of the TikTok IPO: the history of the company, when is the TikTok IPO date, TikTok IPO price and everything you should know to make a decision whether to invest in it or not.
TikTok History
TikTok, a video app that enables users to create engaging content with music and filters, has gained immense popularity with over a billion users worldwide. Initially launched in China in 2016 under the name Douyin, the app was rebranded as TikTok in 2017 and has since been a global sensation. While Douyin remains its name in the Chinese market, TikTok has gained massive traction worldwide, particularly during the Coronavirus pandemic when people sought online engagement while staying at home. Which caused an inevitable question “When is TikTok going public?”
Despite its rapid growth, TikTok has not been immune to controversies. In 2019, TikTok was banned in India due to concerns about pornographic content and predatory behavior. The app was again banned in India in 2020 amid tensions between the two countries over tech companies not protecting user data. TikTok's Chinese owner was also fined $5.7 million by US authorities for violating children's data privacy laws.
Despite these challenges, TikTok remains one of the most downloaded apps in the world. In early 2021, it had over 689 million active monthly users worldwide, as of April 2023 is has over a billion monthly active users. Its unique features and appeal have made it a global sensation in a relatively short period of time.
Following the IPO success of Tiktok’s competitors such as Snapchat, it was about time to announce TikTok IPO date and price.
Tiktok’s Public Listing Key Data and IPO Date
TikTok IPO Date: TBA
Ticker: N/A
Exchange: Nasdaq
IPO stock price: N/A
Valuation at IPO: $66 billion (estimated)
Market cap: N/A
CEO: Shou Zi Chew
Category: Social Media
There was no official confirmation when TikTok goes public with an IPO. However, there were rumors in April 2021 that TikTok's parent company, ByteDance, was preparing for an IPO, with TikTok likely to go public in the US and ByteDance's domestic assets in Hong Kong.
Speculation at that time suggested that the TikTok IPO date might happen in 2023, but several regulatory issues needed to be resolved before that could happen. One of the major challenges was the operational separation of TikTok from its Chinese counterpart Douyin, as the two apps shared the same algorithm and technology.
It's important to note that at the time of my knowledge cutoff, there was no information available on the TikTok IPO price. Investors had valued TikTok at about $50 billion in July 2020, and its brand value had increased to $66 billion by early 2021. However, these valuations were made in private capital markets and may not necessarily reflect the eventual IPO price.
Given the recent CEO's testimony is the US Congress, where TikTok was accused of the potential ties to China and the negative impact of its short videos on children's mental health, the TikTok IPO might be delayed for a long time. So the TikTok IPO date and price remain unknown.
So What About Investing Now?
Some investors may see potential benefits in investing in TikTok due to its massive user base and growing popularity, which could translate into strong revenue growth and potential profitability in the future. The platform's extensive user engagement, particularly among younger demographics, may also make it an attractive advertising platform for businesses looking to reach a wide audience.
The element that makes TikTok stand out is that it's powered by artificial intelligence. When users engage with content, the app collects their data which is fed into TikTok’s machine learning algorithm. This enables the app to refine the quality of users’ content feed and enhances the content experience, which the company claims, in turn, boosts engagement and generates more data.
Additionally, ByteDance, TikTok's parent company, is a major player in the global tech industry, with a diverse portfolio of popular apps and services. As a result, some investors may see investing in ByteDance as a way to gain exposure to a range of high-growth tech companies.
In terms of revenue, TikTok's revenue increased from approximately $20 billion in 2019 to $35 billion in 2020, according to estimates. However, ByteDance as a whole is said to be unprofitable, with a reported net loss of around $2 billion in 2018 and around $1.2 billion in 2019.
It's also worth noting that ByteDance has faced regulatory challenges and geopolitical tensions in some markets, particularly in the United States and India, which have affected its operations and potential for growth in those regions. Additionally, the competitive landscape in the social media industry is constantly evolving, with TikTok facing stiff competition from established players like Instagram Reels and newer YouTube Shorts.
FAQ
Is TikTok publicly traded?
TikTok is a hugely popular social media platform that has been the subject of much speculation in recent years regarding a potential IPO. The current CEO of TikTok is Shou Zi Chew, who joined the company in March 2021. Despite rumors and reports, no official statement has been made regarding when or where TikTok will go public.
How much does TikTok worth?
Investors had valued TikTok at about $50 billion in July 2020, and its brand value had increased to $66 billion by early 2021. However, these valuations were made in private capital markets and may not necessarily reflect the eventual IPO price.
What is TikTok’s business model?
TikTok makes money primarily through advertising revenue. The app allows brands and advertisers to create and promote ads to its user base through a variety of ad formats, including in-feed ads, brand takeovers, and sponsored hashtags. They also explore e-commerce and live streaming as additional revenue streams.
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