ByteDance Initiates Generous Employee Share Buy-Backs Amid Growing Valuation
ByteDance's Share Buy-Back Program
Social media giant ByteDance, owner of hit short video platforms TikTok and Douyin, has initiated a new round of share buy-backs for employees that price the equity nearly 6 per cent higher than in the previous round. The latest repurchase programme, which is initially open to employees based in the United States, priced the vested restricted stock units (RSUs) at US$181 per share, up almost 6 per cent from US$171 during the round held in spring this year, according to a person familiar with the matter.
Details of the Repurchase
- Former employees can sell back their RSUs at US$154 per share, reflecting a 5.5 per cent increase.
- ByteDance's more generous buy-back plan suggests a growing company valuation, bolstered by rising revenue and app popularity.
- Reports also indicate that ByteDance is seeking a US$9.5 billion bank loan, potentially the largest corporate loan facility in Asia.
Implications for U.S. Employees
Founded in 2012, ByteDance has aimed to facilitate employee liquidity through share buy-backs since 2017. Notably, the program had exclusions for US-based employees due to complex taxation issues until last year.
- Under new tax arrangements, US employees can withhold up to 37 per cent of vested RSUs for tax payments.
- ByteDance's valuation peaked above US$400 billion in 2021.
Legal Challenges and Future Outlook
Currently, ByteDance faces legal challenges in the U.S. regarding a law compelling the company to divest TikTok's US assets by January 2025. ByteDance and TikTok argue that the law breaches U.S. Constitutional provisions, with oral arguments scheduled for September 16.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.