ByteDance, the US$75billion ($117.6b) Chinese start-up that owns the short-form video app TikTok, is eyeing an initial public offering in Hong Kong as soon as the first quarter of next year, according to two people
TikTok owner ByteDance eyes IPO in Hong Kong
In the US, senators Charles Schumer and Tom Cotton last week called for intelligence officials to investigate TikTok, which has become a teenage craze, over the "national security risks posed by its growing use".
The company has hired a team at the law firm K&L Gates, which includes Gordon Bart, a former chair of the US House committee on science and technology, to advise on public policy. Its investors are also trying to quell Washington's opposition to TikTok ahead of the potential listing.
"They need more political heft before they go public," said one banker briefed on the IPO plans. "Even if they list in Hong Kong, they still need to address the concerns of US investors."
To minimise the growing US backlash, ByteDance plans to sell TopBuzz, its US news feed business, which has a readership of 300,000, according to a people briefed on the plans.
ByteDance is also hiring a number of former US officials to help it address concerns raised by both Republican and Democratic congressmen in regard to Chinese companies. It is seeking to hire a chief legal officer and staff with Washington connections to push back against concerns ranging from data privacy to whether it is enforcing censorship at the behest of the Chinese government.
These initiatives follow Senator Marco Rubio's recent calls for a review of ByteDance's US$900 million purchase of the Musical.ly app in 2017. TikTok's success has been powered in part by Musical.ly's technology but Rubio alleged that TikTok has censored news on topics sensitive to China, such as the protests in Hong Kong and alleged human rights abuses in Xinjiang. ByteDance's US general manager, Vanessa Pappas, has categorically denied those allegations.
ByteDance reported revenues of between US$7b and US$8.4b for the first half of the calendar year, according to Reuters, and was profitable in the month of June.
A ByteDance spokesperson declined to comment on the listing plans or the sale of TopBuzz.
Written by: Henny Sender
© Financial Times