TikTok IPO: 3 things you must know before the company goes public
With investors eagerly awaiting a 2020 IPO, we take a look at some of TikTok’s most important metrics.
The premise of the TikTok app is deceptively simple: users create and share short videos with one another, primarily for entertainment purposes.
And though TikTok – owned by the China-based ByteDance – has many Western counterparts, the app has still proven incredibly popular on a global scale, carving out a strong audience, particularly amongst younger generations.
This rising popularity has caused many to speculate when (TikTok) ByteDance would pursue an IPO, with the public currently awaiting a 2020 listing.
On this front and as IG’s Chief Market analyst, Chris Beauchamp recently pointed out:
‘ByteDance is, according to the media, the world’s most valuable start-up, with suggestions of a $75 billion price tag doing the rounds.’
Looking at some of the key statistics behind the company – with a focus on the TikTok app in particular – one sees why such a valuation may potentially be justified.
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Total downloads at a glance
The TikTok app – launched in just 2017 – has already gained significant popularity, hitting a staggering one billion downloads this February.
Maybe more impressively however and according to Oberlo: TikTok was the most downloaded app on the entire Apple app store in the first-quarter of 2019, leading even the likes of the ever-popular YouTube, Instagram, Facebook and Snapchat.
Monthly active users in focus
Besides overall downloads, TikTok has already established a consistent user-base who regularly return to the app.
Quantifying this appeal and according to Datareportal, TikTok currently has a 500m active monthly users (MUAs) – all across the globe.
Comparing this against some of the other social media juggernauts and in terms of monthly active users we see that Facebook has 2.4bn MUAs, YouTube 1.9bn, WhatsApp 1.5bn, Twitter 330m and Snapchat 301m – according to dustinstout.com.
TikTok IPO: key fundamentals
Though these user-centric metrics are impressive, the company remains loss-making – though continues to anticipate strong top-line growth.
According IG’s Chief Market analyst, Chris Beauchamp:
‘ByteDance said that it was loss-making in the first half of 2019, although the firm said it made a profit in June and was confident of becoming profitable in the second half of the year.’
Speaking of valuations, Mr Beauchamp continued by noting that:
‘2018’s revenue figure was $7.2 billion, which would put the firm on a multiple of around 10 times revenue. The firm plans to double this revenue, but it is not clear how this is to be achieved.’
Watch this space.
Click here to discover more about the TikTok IPO before it goes live
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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