China’s ByteDance values itself at $300 bn despite a looming threat to its business, what’s the maths

ByteDance, the Chinese parent company of TikTok, has set its valuation at $300 billion, one of the highest ever till date. Interestingly, this comes at the time when ByteDance struggles to maintain its globally famous social media app’s presence in the United State.

By mid-January, TikTok would be banned in the US under a federal law unless ByteDance sells the app to an American owner. But how did the valuation of ByteDance surge this high?

$180.70 per share buy back

According to a report by Reuters, ByteDance approached investors in the recent weeks, with a buyback program, offering a price of $180.70 per share.

The offer price is 12.9 per cent higher than the per share of $160 during the last buyback programme.

ByteDance has been conducting share buybacks since 2022 and this was its third such program for the investors.

In October 2023, ByteDance valued itself at nearly $225 billion. Same year in December, the company offered to buy back shares worth around $5 billion from investors at a price of $160 each, which valued the company at $268 billion.

As per a report by The Wall Street Journal, the valuation of ByteDance climbed following a series of buybacks.

ByteDance facing threat of ban in US

On April 24 this year, US President Joe Biden signed a law, giving ByteDance time till January 19 to sell TikTok or face a ban.

The US does not want to put a ban on TikTok, but wants its Chinese-based ownership to end.

However, the potential ban could massively impact ByteDance’s user base as well as revenue.

Trump a ray of hope for ByteDance?

ByteDance’s high valuation and optimistic outlook is visible despite the looming threat due to the potential ban of TikTok in the US. This is due to US President-elect Donald Trump’s return to the White House.

Trump, who was once TikTok’s biggest foe and signed an executive order in his last term in the White House to ban the social media platform in the US for national security concerns, has changed his position over the recent months.

Trump softened on TikTok during his 2024 US Presidential election campaign. He even joined the social media app, after his meeting with billionaire GOP megadonor Jeff Yass, who has a major financial stake in TikTok, in March this year.

Trump joined TikTok to reach younger voters and said that he would “never” ban the social media platform.

The US-President elect had also earlier said that he opposed a ban because it would help Mark Zuckerberg and Meta, which he has called “an enemy of the people.”

Trump, in September, posted on Truth Social advising “all of those that want to save TikTok in America” to vote for him.

ByteDance has long been under the scrutiny in the US over concerns that TikTok’s data could be accessed by the Chinese government, though TikTok has repeatedly denied sharing user data of America with the Chinese government or receiving a request for the same.

With inputs from agencies.