ByteDance, which owns TikTok, is raising the price of shares that employees can buy back.
Beijing: Two sources said that ByteDance, the Chinese company that owns TikTok, will start a second share buyback for employees this year at a higher price than the first one. This is to keep employees motivated in the face of slowing growth and uncertainty about a plan to go public.
They said that ByteDance told employees in an email that those who are eligible can apply to cash out their Restricted Stock Units (RSUs). RSUs are ByteDance’s stock option programme. They said that it offered $155 per unit, which was more than the $142 price set for the buyback earlier this year.
The higher price is meant to motivate employees by making it easier for them to turn their holdings into cash, said sources who did not want to be named because the information was private.
ByteDance, which has about 10,000 employees around the world, didn’t answer right away when asked for a comment.
It was not clear right away how much of the company employees own or how much ByteDance has set aside for the buyback.
It is one of the most valuable private tech companies in the world, and this year it has launched a number of incentive plans, including programmes that give stock options at a lower price. This is because the company’s revenue growth has slowed, dropping to 70% last year from more than 100% the year before.
China’s economy is slowing down, which is mostly due to strict COVID-19 limits, and Beijing’s crackdown on the tech sector has hurt many Chinese tech companies’ earnings and valuations.
Different sources say that the 10-year-old company usually gives employees the chance to buy back their stock options twice a year.
Reuters has heard from different sources that ByteDance had thought about doing an IPO in Hong Kong.
But earlier this year, the company’s chief financial officer, Julie Gao, told employees at an internal meeting that there was no timetable for an initial public offering (IPO).
Sources say that the unlisted company was worth around $300 billion, or about $170 per share, on the secondary market for private equity. This is down from a peak of around $400 billion last year.
The company also started buying back its own shares last month, which could cost up to $3 billion. This would put the company’s value at up to $300 billion.
