ByteDance begins second share buyback in 2022 for employees
ByteDance has launched various incentive plans in 2022 including stock-option-granting programmes at a lower price amid slowing revenue growth
Beijing — TikTok’s owner, ByteDance, is initiating a second share buyback for employees in 2022 at a higher price than the previous one, in a bid to motivate employees amid slowing growth and uncertainty over a plan to go public, two sources said.
They said China’s ByteDance told employees in an email that those eligible could apply to cash out their Restricted Stock Units (RSUs), ByteDance's stock option programme. It offered $155 per unit, up from the $142 price set in the buyback earlier in 2022, they said.
The higher price is aimed at motivating employees by helping them monetise their holdings, the sources said, declining to be named as the information was confidential.
ByteDance, which has about 110,000 employees globally, did not immediately respond to a request for comment.
It could not be immediately determined how much of the company was owned by employees or how much ByteDance had set aside for the buyback.
One of the world’s most valuable private tech companies, ByteDance has launched various incentive plans in 2022 including stock-option-granting programmes at a lower price amid slowing revenue growth, which fell to 70% in 2021 from more than 100% a year earlier.
The economic slowdown in China, much of which is due to stringent Covid-19 curbs, and Beijing’s regulatory crackdown on the tech sector have crimped earnings as well as valuation prospects for many Chinese tech firms.
The 10-year-old company usually launches stock option buybacks twice a year for employees, separate sources have said.
ByteDance had explored conducting an initial public offering (IPO) in Hong Kong, different sources have told Reuters.
But earlier in 2022, CFO Julie Gao told employees at an internal meeting that the company had no timeline for an IPO, according to people who attended the meeting.
The unlisted company was valued at around $300bn recently, or roughly $170 per share, in the private-equity secondary market, down from a peak of around $400bn reached in 2021, sources have said.
The company also launched a share buyback in September that will see it spend up to $3bn in repurchasing shares from its investors, which valued the company at up to $300bn.
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