ByteDance IPO
Chinese start-up ByteDance became a household name after launching its famous TikTok app in 2017. Discover when ByteDance is expected to list and how you can start trading the IPO today.
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Why trade ByteDance's IPO with IG?
Trade before the IPO
Get exposure before the listing by trading the predicted market cap – exclusively to our clients
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Invest in ByteDance the moment it lists with a share dealing account
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What's on this page?
How to trade the ByteDance IPO
You can trade the ByteDance IPO before and after the company lists.
- Before the listing
- After the listing
Trade our ‘grey market’ ahead of the Bytedance listing. The price reflects what our clients expect ByteDance’s market cap to be at the end of its first trading day.
With our grey market, you can:
- ‘Buy’ if you think the market cap will be higher than the price indicated
- ‘Sell’ if you think the market cap will be lower than the price indicated
Click through to see the ByteDance grey market analysis chart
You could trade ByteDance after the listing by speculating on its share price movements or investing in its shares.
When you take a position with us, you can choose to:
- Trade derivatives like spread bets and CFDs
- Buy shares outright via share dealing
Trading vs investing in ByteDance shares
Trading vs investing in ByteDance shares
Trading and investing are different in a number of ways. When trading ByteDance shares with us, you’ll use spread bets or CFDs to speculate on share price movements. These derivatives let you take a position without owning the underlying shares, plus, you could receive various tax benefits.* With spread bets and CFDs, you can speculate on shares that are rising (known as going long) or falling (known as going short) in value. If your prediction is correct, you’ll make a profit, but if you’re wrong about the market movement, you’ll take a loss.
With us, you’ll trade on leverage. You’ll only need a small deposit – known as margin – to open your position, while still getting exposure to the full value of the trade. Trading using leverage increases both your profits and losses, as this will be based on the full trade amount and not just the margin requirement.
Learn more about the impact of leverage on your trades
When investing in shares with us, you’ll buy and own physical shares using a share dealing account. Leverage isn’t available when you’re share dealing – so you’ll need to commit the full value of your position upfront. Buying shares will make you a shareholder – eligible to receive dividends and voting rights – and you’ll profit if the share price increases above the price at which you opened your position. If you decide to sell your shares at a point when the share price has decreased below the price at which you opened your position, you’ll take a loss. However, your risk is capped at the price you paid for your shares (excluding additional fees).
* Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
ByteDance and TikTok: what’s happening?
Speculation has been mounting for some time that ByteDance will spin TikTok off as a separate entity. As things stand, a new entity is being created called TikTok Global, which will be 80% owned by ByteDance and 20% owned by Walmart and Oracle. The new company will be based in the US.
But, the ownership stakes are being contested by people at Oracle and Walmart, who claim that they don’t want ByteDance to have any majority ownership of TikTok Global, adding that shares will be distributed in the US. If Oracle and Walmart get their way, TikTok Global will eventually be majority owned by US firms.
ByteDance have confirmed that TikTok Global will have its own IPO in due course, separate to the ByteDance IPO.
When could the ByteDance IPO happen?
The date for the ByteDance IPO has not been confirmed. Speculation surrounding the IPO date has been rife, with the firm currently reported to be eyeing a 2021 listing in Hong Kong or Shanghai.
What is ByteDance’s business model?
ByteDance’s business model is centred around mobile apps and content platforms, such as the news recommendation engine Toutiao. This offers a tailor-made news feed to users based on how they interact with the content.
ByteDance relies heavily on advertising for income, but it is always looking to develop new products that could fortify its revenue stream. It has more than three times the number of active users than rival Snapchat, which held its IPO in 2017.
Is ByteDance profitable?
Yes, ByteDance is profitable, and the company is reported to have made net profits of over $3 billion from revenues of $17 billion in 2019.2 This reflected a phenomenal year of growth after the company reported a loss of $1.2 billion in 20183 from estimated revenues of $7.4 billion.4
In 2020, ByteDance reportedly generated $5.6 billion in revenue in Q1, and is targeting revenues of around $28.7 billion for the year.4
What might happen to our ByteDance grey market price when TikTok is sold?
When TikTok is sold – in whole or in part – we will continue to price our ByteDance IPO grey market. That’s because the price reflects the balance of buyers and sellers on our platform, and therefore moves as sentiment towards ByteDance shifts.
For example, the market was volatile when Microsoft announced it was thinking of purchasing TikTok’s US business, and when Trump announced he was thinking of banning the social media platform. As a result, it’s likely that ByteDance’s eventual ownership stake in TikTok could affect the former’s IPO valuation. Contradictory figures have been released, with some stating that ByteDance will own 80% of the video creation and sharing platform, and others saying that it won’t even control a majority.
Our analysis on the ByteDance IPO
By Chris Beauchamp
ByteDance appears to have struck a deal with Oracle and Walmart, in which the US firms will take partial ownership of TikTok Global. This convoluted deal has been agreed in order to assuage the anger of US President Donald Trump, who accused TikTok of being a threat to national security.
Under the terms of the deal Oracle and Walmart will together own 20% of the new entity, with four out of five board members, even as Mr Trump argues for the firm to come under full US control. ByteDance has found itself caught in the middle of a broader economic and political clash between the two global superpowers, involving a host of issues including tariffs, intellectual property, Hong Kong, Taiwan and the spheres of influence of the two nations.
The deal is evolving even as the clock ticks down to a potential ban on TikTok in the US, with Donald Trump keen to burnish his credentials as a defender of American security ahead of a presidential election that may well see his opponent Joe Biden take power. Investors have watched in worried fascination, aware that the result of this sale will have repercussions far beyond the actual companies involved.
The sale of part of its TikTok brand has brought into question whether ByteDance will push ahead with its IPO plans, and recent turmoil in tech stocks has also muddied the waters for any market debut. The app’s appeal around the globe is undoubted, but there is always the risk that other countries could follow the US approach as concerns about the influence of Chinese technology increases.
Read more analysis on the Microsoft deal here
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Prices above are subject to our website terms and conditions. Prices are indicative only.
How do IPOs work?
IPOs – short for ‘initial public offerings’ – happen when a company decides to list its shares on an exchange. This means the public can then buy or trade the shares.
IPOs can create a lot of interest, especially if the company is doing well. To learn more about IPOs and how they work, watch this short video.
FAQs
Can I profit when trading initial public offerings (IPOs)?
You can profit when trading initial public offerings if you correctly predict share price movements. But if your prediction is incorrect, you’d incur a loss. You can use CFDs or spread bets to speculate on our grey markets before an IPO, or on share price movements after the stock has listed. You could also profit from an IPO if you buy shares outright through our share dealing service and they rise in value. If the value of the shares drop when you sell them, compared to when you bought them, you’d take a loss. This is, however, capped at your initial investment outlay.
What are the risks of trading or investing in an IPO?
Many risks are involved in all trading or investment activity – IPOs have additional risks. These include:
- Not having enough important company information that might affect share prices, eg pending legal cases and intellectual property that isn’t patent protected
- Minimal or no trading history to base trading decisions on
- Market expectations that are not met
- A company not meeting its target market cap
It’s important that you collect all the relevant information before you commit to any trade. Some useful IPO documents include company prospectuses and admission documents. Staying informed helps you avoid risks that might affect your position.
Where can I find the ByteDance IPO grey market?
You can find the ByteDance IPO grey market in the ‘popular markets’ watchlist on our online trading platform.
Our ByteDance IPO grey market is the only way you can trade ByteDance before its listing, and is exclusively available to our clients.
What is a grey market?
A grey market enables you to speculate on a company’s estimated market cap before its shares are released. If you think the estimated value of the company is over- or under-priced, you can use the grey market to back your prediction.
It’s important to note that, when you decide to trade the grey market, you’re trading on the estimated valuation. The official market valuation (what the market thinks the stock is worth) won’t be known until the end of the first day of trading – and it is based on the demand shown by the market that day. When this happens, the grey market will settle.
How does ByteDance make money?
ByteDance makes money by selling advertising space on its social media platforms and apps. These include Douyin, Toutiao, TikTok and Xigua Video. The company is reported to have made net profits of over $3 billion from revenues of $17 billion in 2019.2
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1 24/7 excludes the hours from 10pm Friday to 8am Saturday (UK time), and 20 minutes just before the weekday market opens on Sunday night
2 Business Insider, 2020
3 The Information, 2019
4 Bloomberg, 2020
5 Tech Crunch, 2020
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