Many people think ByteDance Ltd could become the hottest initial public offering (IPO) of the decade. It is easy to see why these people want a ByteDance IPO. ByteDance created two of the world’s most popular and fastest-growing social media platforms, TikTok and Douyin.
Douyin and TikTok are variations of ByteDance’s addictive video-sharing app. The easy-to-use app allows users to share short videos that many people find entertaining.
What is ByteDance?
ByteDance Ltd. Is a privately-held Chinese tech company. They base ByteDance in China, but its products are available in 150 markets worldwide. There are ByteDance offices in 126 cities, including Beijing, Shanghai, Los Angeles, New York, London, Paris, Berlin, Dubai, Mumbai, Singapore, Jakarta, Seoul, and Tokyo. ByteDance operates 15 research and global centers worldwide.
Can You Buy ByteDance Stock?
No, there is no ByteDance stock available to purchase on any stock exchange globally. Shares in ByteDance are owned by the founder Yiming Zhang and eight private equity firms Coatue, General Atlantic, Hillhouse, KKR, Sequoia Capital, SIG, Softbank, and Source Code Capital. You cannot invest in any of these companies.
ByteDance Stock Price
ByteDance does not have a stock price because it is not a publicly-traded stock. ByteDance’s future stock price would be calculated during any future IPO, taking into account revenue, profitability, and future growth potential.
Is There a ByteDance Stock Symbol?
There is no ByteDance stock symbol, although there has been speculation about a ByteDance IPO for years. The Wall Street Journal claims there is a ByteDance stock ticker; BDNCE, but presents no evidence that the ticker exists. However, there could soon be a way for you to invest in a ByteDance product through the American stock market.
The ByteDance products include Douyin, Toutiao; a content discovery platform; TikTok, Xigua Video, the Indian social media platform Helo, the Lark collaboration tool, and Babe, Indonesia’s leading content app.
A ByteDance IPO
The closest thing to a ByteDance IPO is the announcement that TikTok Global, a subsidiary of Bytedance, will be publicly-traded. So far, in 2021, this has not happened due to the change in US political leadership. What we do know is that ByteDance does not want an IPO as it wants to maintain complete control of TikTok.
They were trying to recruit a social media veteran to serve as TikTok Global’s CEO in October 2020. Instagram co-founder Kevin Systrom was among the candidates under consideration, Deadline claims.
3 Ways to Invest in ByteDance
1. Buy TikTok Global
The most interesting alternative stock to ByteDance is not available yet and could never exist. That company is TikTok Global, which will own and operate TikTok.
In September 2020, ByteDance announced that TikTok Global would be publicly-traded and hold an IPO, Deadline reports. They were trying to recruit a social media veteran to serve as TikTok Global’s CEO in October 2020. Instagram co-founder Kevin Systrom was among the candidates under consideration, Deadline claims.
The Wall Street Journal claims the US Justice Department put the TikTok Global Deal on hold on February 10, 2021, because President Joe Biden (D-Delaware) is “reviewing TikTok Global’s security.” Former US President Donald J. Trump (R-Florida) approved the TikTok Global deal in September 2020.
The Journal speculates Biden’s action could lead to a different deal. The need for a TikTok Global deal is less urgent because courts have ruled that the US federal government lacks the power to ban TikTok in the United States. The TikTok Global proposal was a response to Trump’s attempts to ban TikTok in the United States in 2020.
Investors need to view The Journal’s claims with skepticism because its journalists base their claims on “anonymous sources.” Thus, the actual status of TikTok Global is unknown. However, one of the potential TikTok Global owners, Walmart, is partnering with ByteDance on e-commerce.
I think President Biden’s action could make a ByteDance stock more valuable because it could kill TikTok Global. Thus, ByteDance will own and operate TikTok and make all the money from it.
TikTok Global Stock Ticker
We know few details about TikTok Global because the company does not appear to have a website. In September 2020, ZDNet reported that ByteDance planned to take TikTok Global within a year.
Under the plan they unveiled in September 2020, ByteDance would initially own 80% of TikTok Global. It is not clear how much of TikTok Global ByteDance will sell in the IPO. There is some media speculation that ByteDance wants to divest itself of TikTok Global to avoid political controversy in the United States.
Two American companies Oracle (ORC) and Walmart (WMT), will own the rest. Walmart could own 7.5% of TikTok Global and Oracle 12.5%.
TikTok is making business deals without TikTok Global. The Universal Musical Group (UMG) and TikTok (presumably TikTok Global or ByteDance) have signed a global agreement, Variety reports. The agreement increases the compensation UMG artists and songwriters could receive from TikTok.
The agreement will allow TikTok users to add video and audio clips from UMG’s music catalog to their videos. Thus, UMG will use TikTok and its users to promote its music.
Walmart (WMT) is selling clothing through its TikTok profile page, Fashion Week reports. Walmart tested TikTok retail through a Livestream featuring TikTok creators in December 2020. Walmart’s TikTok page features short videos that focus on products. Customers can buy the products.
Walmart is partnering with TikTok creators who promote its products. Walmart held a live stream with TikTok stars on December 18, 2020. The live stream featured 10 TikTok creators, including dancer Micheal Le, wearing Walmart fashions viewers could order through Walmart’s profile page. Walmart claims Le has 43 million followers on TikTok.
Walmart could invest in TikTok Global and is marketing through TikTok because of its reach in the United States. TikTok had 80 million active users in the United States in January 2021. Influencer Marketing Hub estimates that 23% of US Internet users have seen TikTok videos.
TikTok Global could make money. The Information estimates that TikTok’s 2020 US revenues were $500 million.
They have announced no details of a TikTok Global IPO, including the ticker symbol. Investors need to watch for a TikTok Global IPO because it could create a large social media company that makes money.
I think TikTok Global could become a major player in social media. One smart move for TikTok Global could be to buy up money-losing social media companies such as Twitter (TWTR) and Snap (SNAP), the owner of Snapchat.
Investors need to watch for TikTok Global’s IPO and President Biden’s decision because either development could change social media beyond recognition. Notably, two profitable companies that make money and pay dividends, Walmart and Oracle, own stakes in TikTok Global.
You cannot buy TikTok Global stock now, but you can buy shares in two dividend-paying companies that could own part of TikTok Global: Oracle (ORC) and Walmart (WMT). Many people consider Oracle and Walmart good investments.
2. Invest in Oracle Corporation (NYSE: ORCL)
Oracle (ORC) is one of the world’s largest providers of financial software. However, Oracle is a small player in the $129 billion cloud infrastructure market.
Statista estimates that Oracle controlled just 2% of the global cloud infrastructure market in the fourth quarter of 2020. Oracle lags far behind the two largest players in the market; Amazon Web Services (AWS) and Microsoft’s Azure. Statista estimates that AWS controlled 32% of the cloud services market and Azure controlled 20% in the 4th Quarter of 2020.
There are some segments of the cloud market where Oracle is a competitive player, however. The Synergy Research Group estimates that Oracle controlled 25% of the enterprise Software as a Service (SaaS) market in the second quarter of 2020. Enterprise SaaS consists of cloud-based apps and platforms for business or government use.
Oracle’s management hopes they can expand the use of the Oracle Cloud and Oracle’s share of the cloud infrastructure market with TikTok. Oracle could own 12.5% of TikTok Global in the plan ByteDance unveiled in September 2020, MarketMadHouse notes.
“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud,” Oracle CEO Safra Catz said in a press release. “We are 100% confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users.”
Oracle Founder and Chief Technology Officer Larry Ellison thinks TikTok can promote the use of Oracle’s Generation 2 Cloud. The Generation 2 Cloud will host Tik Global and TikTok under the current plans.
I think Ellison believes Oracle can sell SaaS apps and products through TikTok. They designed the Generation 2 Cloud to serve the needs of large organizations.
Oracle makes money. The Oracle Corporation (ORC) reported a quarterly gross profit of $7.861 billion, quarterly venues of $9.8 billion, and a quarterly operating income of $3.583 billion on November 30, 2020.
Oracle can generate enormous amounts of cash. It reported a quarterly ending cash flow of $27.276 billion on August 31, 2020. The quarterly ending cash flow rose from $13.41 billion on May 31, 2020, and fell to $725 million on November 30, 2020. Similarly, the quarterly operating cash flow fell from $5.953 billion on August 31, 2020, to $1.388 billion on November 303, 2020.
I think Oracle offers tremendous value. That value included $35.593 billion in cash and short-term investments and $110.014 billion in total assets on November 30, 2020.
Ellison and Catz want to invest in TikTok Global because Oracle’s growth is small. Stockrow estimates that Oracle’s revenues grew by 1.93% in the quarter ending on November 30, 2020. Oracle’s quarterly revenues grew from $9.614 billion on November 30, 2019, to $9.8 billion on November 30, 2020.
Oracle shares are cheap, but the price is growing. Mr. Market paid $63.21 for Oracle shares on February 10, 2021. The share price rose from $54.99 on February 10, 2020. Thus, ORCL offers some share value growth.
The dividends are one of the primary attractions at Oracle. Oracle shares paid a 24₵ quarterly dividend on January 21, 2021. In 2020, Oracle shares offered a 96₵ annual dividend and a 5.495% dividend yield, Dividend.com estimates.
I think Oracle could be one of the best ways to invest in TikTok Global because it is a moneymaking company with a cheap stock that pays a dividend. Thus investors could make money if there is no TikTok Global.
3. Buy Walmart Stores (NYSE: WMT)
Walmart, the world’s largest retailer, could be the most interesting ByteDance-related investment because it experimented with TikTok merchandising.
Walmart’s management plans to use live streams (live TikTok videos) to sell its products. The first live stream was the Holiday Shop-Along Spectacular on December 17, 2020. During the Spectacular, 10 TikTok stars promoted Walmart fashions. TikTok users could buy the fashions from Walmart.com.
A long-term plan is to have live streams spotlighting products. Each live stream will feature a button a person can press to order the product from Walmart. The customer can pick the product up at Walmart or have it shipped to her.
Walmart’s CEO Doug McMillon thinks TikTok can help his company compete with Amazon (AMZN). McMillon could even sit on TikTok Global’s board of directors, MarketWatch claims.
Buying WMT shares can help you invest in a ByteDance product because Walmart (NYSE: WMT) could own 7.5% of TikTok Global. Walmart and Oracle are teaming up with ByteDance to create TikTok Global.
Walmart makes enormous amounts of money from its stores. Walmart reported $134.708 billion in quarterly revenues, $34.369 billion in quarterly gross profits, and a quarterly operating income of $5.778 billion on October 31, 2020.
I think Walmart could dominate TikTok Global because it generates enormous amounts of cash. For instance, Walmart reported a quarterly operating cash flow of $11.939 billion on July 31, 2020, which fell to $3.924 billion on October 31, 2020.
There was also a quarterly ending cash flow of $14.985 billion on April 30, 2020. The quarterly ending cash flow fell to $1.969 billion on July 31, 2020, and -$3.526 billion on November 31, 2020.
Walmart’s quarterly ending cash flow fell because it was paying off debts. Walmart reported a quarterly financing cash flow of -$8.379 billion on July 31, 2020, which fell to -$3.526 billion on October 31, 2020.
The debt at Walmart is enormous. The company reported $48.021 billion in long-term debt on January 31, 2020. In 2020, the long-term debt fell to $45.599 billion on October 31, 2020.
The value at Walmart enormous. The company reported $250.863 billion in assets and $14.325 billion in cash and short-term investments on October 31, 2020.
Walmart is a moneymaking company that is capable of enormous growth. In 2020, Walmart’s total assets grew from $236.495 billion on January 31, 2020. The cash and short-term investment grew from $9.465 billion on January 31, 2020.
Stockrow estimates that Walmart’s revenues grew at a rate of 5.25% in the quarter ending on October 31, 2020. I think the growth gives Walmart a strong margin of safety in a changing world.
I think the greatest value at Walmart is the company’s platform of 11,150 retail stores worldwide. Those stores included 599 Sam’s Club stores and 4,748 American Walmarts in February 2021.
Walmart could leverage TikTok to expand its growing e-commerce sales. The Visual Capitalist estimates that Walmart was the second-largest US e-Retailer with $46.3 billion in annual sales in October 2020. The largest US e-Retailer is still Amazon (AMZN), which had $309.6 billion in sales in October 2020.
I do not think Walmart will overtake Amazon anytime soon. However, I think TikTok could help Walmart increase its online sales by 10% to 15%. If Walmart could achieve that growth, it will make more money.
Walmart could also use TikTok to reach younger shoppers who hate going to brick-and-mortar stores. Statistics show younger people use TikTok. Statista estimates that 62% of US TikTok users were under 29 in June 2020. Statista estimates that 32.5% of American TikTokers were 10 to 19 years of age and 29.5% were between 20 and 29.
The problem with this marketing strategy is that younger people have less money. Teenagers, for example, do not work or work at low-paying menial jobs.
I suspect McMillon’s real strategy is to appeal to younger people who will have families and incomes in a few years. Today’s 25-year-old TikTok watching woman will probably have children and shop at Walmart in a few years. McMillon wants his merchandise in front of that woman.
I consider Walmart a good stock because Mr. Market pays a reasonable price for it; $144.14 on February 10, 2021. Its stock also pays an impressive dividend.
Walmart shares paid a 54₵ quarterly dividend on January 4, 2021. In 2020, that dividend grew from 53₵ on January 2, 2020. Overall, Walmart paid an annual dividend of $2.16 and an annual dividend yield of 1.5% on January 2, 2020.
I consider Walmart (WMT) the best TikTok stock because it is a proven moneymaker that grows and pays a large dividend. Walmart also has enormous value in the form of its 11,150 stores and growing e-commerce business.
If any company can make money from TikTok, it could be Walmart. Oracle could also make money from TikTok by hosting TikTok e-commerce solutions such as Walmart’s live streams on its Oracle Cloud.
Walmart is a company that could make money from TikTok and ByteDance even if there is no TikTok Global. Walmart could make money selling merchandise on TikTok if either ByteDance or TikTok Global owns it.
Investors need to pay attention to ByteDance and TikTok Global because moneymaking companies are working with those companies. I think Oracle and Walmart’s management’s interest in TikTok Global and TikTok shows that TikTok and ByteDance could be moneymakers.
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