Credit：Visual China

ByteDance recently offered to buy back shares from current employees at $160 apiece, suggesting a valuation of $223.5 billion given the outstanding shares of 1.4 billion, the U.S. tech news outlet The Information reported earlier this week. Reuters’ source echoed the new share and valuation, adding that ByteDance is seeking to buy at least $300 million worth of stock from current and former employees. The latest valuation is about 26% less than that a year ago and is well below a peak of about $460 billion in 2021, when Tiger Global Management said it spent $1.1 billion to take the company’s shares.

The report showcased ByteDance’s valuation kept slumping these years. G42, an AI and cloud computing technology company founded in Abu Dhabi, was reported in March to acquire stakes worth of more than $100 million in ByteDance, valuing the Chinese internet giant at about $220 billion. The valuation has been a big discount to that in October 2022, when the unlisted company was reportedly valued around $300 billion following the second stock option buyback in September that year.

Thanks to cut in expense, ByteDance posted operating profit of nearly $6 billion in the first quarter of this year, almost doubling from a year earlier, while revenue of the social media giant continued to slow down, the Wall Street Journal reported, citing a internal financial report a day after The Information’s news. ByteDance’s revenue jumped by nearly 80% in 2021 and annual growth of the next year slowed to more than 38%, according to the report. It said the company recorded operating profit of more than $20 billion last year and maintained profitability since 2021, when it had an operating loss of $7 billion.

ByteDance management has cautioned growth prospect facing various headlines. The leading edge in content offerings, including Douyin, TikTok, and Toutiao, has diminished over the past year or two, CEO Liang Rubo said in an internal meeting held on March 16 to celebrate ByteDance’s 11th anniversary, according to Chinese tech media outlet 36Kr. “We are not very confident to say our work, either in terms of understanding in business or technical capability, is better than peers in China or the global market, as we are still facing severe competition,” Liang warned. He concluded one of the main goals ByteDance will achieve is to focus on two main businesses-- content offerings and e-commerce.

ByteDance didn’t respond to TMTPost’s request for confirmation of recent reports’ data. Reports earlier this year signaled ByteDance is approaching its archrival Tencent Holdings Ltd. by sales in the year 2022, when a wide range of Chinese internet companies were struggling for growth amid macroeconomic slowdown with cost cuts.

Bloomberg reported in April that ByteDance’s sales topped $80 billion with a yearly growth of 30%. If the reported sales were correct, that is undoubtedly a significant achievement since most of tech companies witnessed more or less slowdown last year. The ad revenue of Facebook parent Meta Platforms Inc. declined 1% to $113.6 billion in 2022 with a third straight quarterly decline as of the end of the year. While the annual revenue from ad gained more than 7% to $224 billion from 2021, Google parent Alphabet made $59 billion from advertising in the quarter ended December, a decrease of 3.6% from the same period in 2021. That is the first quarterly drop since the Covid-19 pandemic. ByteDance’s reported sales roughly match Tencent. The WeChat owner disclosed total revenue in 2022 fell 1% year-over-year to about $80 billion, the first annual negative growth for the company founded in 1998.

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