TikTok is a popular social media platform that allows users to create and share short videos on a wide range of topics, from dancing and lip-syncing to comedy sketches and informative content.
TikTok stock is not available to buy on any stock exchange. You can invest in TikTok by buying shares in SoftBank or KKR, which owns stock in ByteDance, TikTok’s parent company.
TikTok is owned by ByteDance Limited, a privately-held Chinese Startup part-funded by KKR, SoftBank, Sequoia Capital China, and seven other venture capital companies.
Note: This is an unbiased research report. The author or Liberated Stock Trader is not affiliated, paid by, or owns stock in any of the companies mentioned in this report.
Is TikTok on the Stock Market?
There are no TikTok shares on the stock market because ByteDance Limited, TikTok’s owner, is privately held. You can buy shares in the private equity companies that own stock in TikTok. Shares in TikTok are owned by the founder Yiming Zhang, Bytedance, and seven private equity firms: Coatue, General Atlantic, Hillhouse, KKR, Sequoia Capital, Softbank, and Source Code Capital.
How to Buy TikTok Stock
You cannot buy shares in TikTok directly as a retail investor. TikTok is not publicly traded because it is owned by Bytedance, a privately-held Chinese company, and eight other venture capital companies.
Does TikTok have a Stock Ticker
TikTok has no ticker symbol or stock name because it is not publicly traded on a stock exchange. Only companies listed on stock exchanges have stock tickers.
Is TikTok on the Stock Market?
It is not confirmed 100% if TikTok will float on the stock market. Many details of the TikTok Global IPO, including the stock exchange and the ticker symbol, are unknown. However, some Chinese companies, including Alibaba (BABA), trade on the New York Stock Exchange. Thus, I think TikTok Global could trade on the NYSE.
TikTok IPO News
There is no official confirmation of a TikTok IPO. While there have been ongoing rumors and discussions about the possibility of TikTok or its parent company, ByteDance, going public, no definitive plans have been announced.
ByteDance, the owner of TikTok, has offered to buy back shares, which suggests that an IPO may not be imminent, as the company is providing liquidity to shareholders without going through a public listing, as reported by South China Morning Post.
It’s important to note that the prospects for a TikTok IPO may be affected by various factors, including market conditions, regulatory environments, and ByteDance’s strategic decisions.
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Who Owns TikTok Stock?
ByteDance Limited, a privately-held Chinese startup, owns TikTok; other investors include Sequoia Capital China, General Atlantic, Hillhouse, KKR, SIG, SoftBank, and Source Code Capital.
TikTok Background & Company Information
TikTok, a video-sharing app, is one of Earth’s most popular media products. TikTok is one of the fastest-growing social media apps.
TikTok is one of the world’s most successful and popular apps, even though it is just five years old. In contrast, ByteDance released the app in 2016, and Mark Zuckerberg began Facebook in 2004.
There have been over 1 billion TikTok app downloads in 2022. TikTok is the most downloaded app in the Apple App Store.
TikTok AI & Algorithms
Analysts think ByteDance powers TikTok with some of the world’s most sophisticated Artificial Intelligence (AI). The AI is why Microsoft (MSFT) tried to buy TikTok’s North American operations in August 2019. Analysts consider AI the secret ingredient in TikTok’s recipe for success.
Many people, including U.S. President Donald J. Trump (R-Florida), think TokTok is a security threat because the AI gathers massive amounts of user data. The government of India banned TikTok as a security threat in 2019.
The data TikTok gathers could be full of valuable customer information.
How To Invest In TikTok
1. Buy Shares of KKR
To invest in TikTok, you can buy shares in KKR. KKR is a leading global investment firm that offers alternative asset management and owns stock in ByteDance, which owns TikTok. KKR (Ticker: KKR) is floated on the NYSE stock exchange and is valued at $41 billion. KKR’s stock price increased by over 200% from January 2020 to 2022.
KKR & Co., Inc. provides investment and private equity asset management services. It manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit, and hedge funds. The firm operates through four business lines: Private Markets, Public Markets, Capital Markets, and Principal Activities.
2. Buy Shares In SoftBank
Buying shares in SoftBank Group Corp means owning a slice of TikTok. SoftBank Group Corp operates as a holding company that manages its group companies. It operates through the following segments: SoftBank Vision Fund, SoftBank, Arm, Brightstar, and Others. The SoftBank Vision Fund segment engages in the investment business.
SoftBank Group Corp is floated on every major stock exchange, so buying the stock is relatively simple. SoftBank Group Corp. (Ticker: SFTBY) stock price has dropped 50% from 2021 to 2022 due to a bad earnings announcement and the underperformance of companies it owns. On the bright side, Softbank now represents serious value with a PE Ratio of only 3 and an EPS of $7.61, which is 30% of its stock price.
3. Approach Private Equity Funds
The final option for acquiring shares in TikTok is to approach the other private equity firms that own a stake in the company.
- Coatue: Coatue is a technology-focused hedge fund led by founder and portfolio manager Philippe Laffont.
- General Atlantic: General Atlantic makes large minority investments in growth companies focusing on computer software and services.
- Hillhouse: Hillhouse Capital Group, based in China, is an investment management firm that invests with a long-term time horizon.
- Sequoia Capital: Sequoia invests in public and private companies specializing in incubation, seed stage, and startup stage investments.
- Source Code Capital: China-based Source Code Capital invests in industrial digitization, artificial intelligence, robotics & advanced manufacturing
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3 Alternative investments to TikTok
There are publicly traded companies similar to TikTok Global and ByteDance you can invest in now. Several social media companies offer similar products to TikTok Global.
Some of those social media companies are proven money makers, unlike TikTok Global.
1. Tencent Holdings ADR (OTCMKTS: TCEHY)
The publicly traded Chinese company Tencent Holdings ADR (OTCMKTS: TCEHY) owns WeChat or Weixin. WeChat is the world’s fifth-largest social media solution. WeChat accounts for 30% of mobile internet use in the People’s Republic of China.
Tencent Holdings Limited, the Chinese multinational conglomerate, has been active in the news, with several recent developments affecting its business.
One significant piece of news is Tencent’s cost-cutting measures and strategic shifts in response to a challenging regulatory environment and a slowdown in the tech sector. The company has been reducing its workforce in some areas and selling off portions of its investment portfolio, including a stake in Meituan, to raise capital. This move to sell part of its stake in the food delivery giant for about $3.5 billion indicates a focus on core businesses and financial prudence.
Tencent has seen positive developments in gaming with China’s approval of new games, a key area for the company’s revenue. The Chinese regulators granted publishing licenses to 44 foreign games, including titles from Tencent, signaling an easing of the freeze on game approvals that had impacted the industry.
Furthermore, Tencent is diversifying its business model and exploring new revenue streams. The company’s cloud services division slashed prices by up to 40% in an intense price war, aiming to capture a larger market share in China’s competitive cloud computing industry.
These moves reflect Tencent’s strategic adjustments to navigate regulatory pressures, focus on profitability, and leverage growth opportunities in its diverse portfolio of businesses. Investors and industry analysts closely watch the company’s actions as indicators of broader trends in the Chinese tech sector.
2. Snap Inc. (NYSE: SNAP)
Snap (SNAP) owns the popular video and photo-sharing app Snapchat, which some observers consider a direct competitor to TikTok. Snapchat’s user base is much smaller than TikTok’s.
Snap is an American company, unlike ByteDance, so President Trump may not see Snapchat as a security threat. All of Snap’s intellectual property is presumably in American hands. That could add value to SNAP.
However, Tencent Holdings owns a significant stake in Snap Inc. President Trump labeled Tencent’s WeChat as being from the United States and banned it in August 2020.
Snap Inc., the parent company of the popular social media platform Snapchat, has made recent business news with several key developments.
Snap Inc. announced its Third Quarter 2023 financial results on October 24, 2023. The report typically provides insights into the company’s revenue, user growth, and profitability, critical indicators of its performance and market position.
On the corporate front, Snap Inc. has been focusing on leadership by adding new members to its board. On September 18, 2023, the company announced that Patrick Spence joined the Snap Inc. Board of Directors, bringing in his expertise to help guide the company’s strategy and growth.
Snap Inc.’s stock has seen significant activity, with shares reaching their highest price in over a year following an upgrade by Wells Fargo from equal weight to overweight, as reported by CNBC. This upgrade suggests increased investor confidence in the company’s prospects.
These business developments are important for Snap Inc. as they indicate its ongoing efforts to stabilize its financial position, innovate its product offerings, and strengthen its corporate governance. The positive stock movement reflects the market’s response to the company’s strategies and performance.
3. Meta (NASDAQ: META)
Meta Platforms Inc. (Facebook) operates the largest social media ecosystem in the world. Meta owns four of the top social media platforms in the world, including Facebook, Instagram, WhatsApp, and Messenger.
Meta is focused on improving user engagement and driving advertising revenue through its platforms. Recently, Meta has also made strategic investments in emerging technologies such as internet infrastructure and artificial intelligence to expand its influence in the digital space further.
The company’s shares have rallied to new highs this year as investors warm up to the potential of these initiatives and their positive impact on future growth prospects. Investors should watch for updates from Meta regarding the progress of its various projects that could provide further upside potential to share prices.
Meta’s third-quarter revenue jumped 23% to $34.15 billion, indicating a rebound in digital advertising. This increase is significant as it suggests a recovery from the digital advertising industry’s challenges, such as privacy changes and economic headwinds (Search Engine Land).
The company’s daily active users (DAUs) grew by 5%, while ad impressions across Meta’s apps grew by 31%, as reported by Reuters. This growth in users and ad impressions is a positive sign for Meta’s core business model, which relies heavily on advertising revenue.
Meta’s strong ad revenue and cost-cutting have driven earnings outperformance, with net income up 164%. The parent company of Facebook and Instagram took in $33.64 billion in ad revenue. This demonstrates the company’s ability to grow its top line and manage expenses effectively to boost profitability.
However, despite these positive indicators, Meta has cautioned that the advertising rebound may not last, suggesting that the company is preparing for potential volatility in the digital ad market.
These developments are crucial for Meta as they reflect the company’s performance in key areas that drive its revenue. The growth in user base and ad impressions, coupled with strong ad revenue, points to a robust demand for Meta’s advertising offerings, even as the company navigates a complex and changing digital landscape.
Many investors dislike Facebook (FB) stock despite its cash. Investors avoid Facebook because it is a cash-rich company that pays no dividends.
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Why is TikTok so Valuable?
Despite a ban in India, ByteDance, TikTok’s owner, claims to have exceeded 1bn monthly users. According to The Economist, on January 12, 2022, App Annie, a data gatherer, said TikTok caught up with Facebook in 2021 and overtook WhatsApp and Instagram in users’ time.
Many people consider TikTok addictive because 90% of users claim to use the app daily. TikTok retains users at a rate of 26%; one out of four people who use TikTok become regular users.
The average user spends 52 minutes on TikTok daily, and Android users spend 68 billion on TikTok annually.
TikTok’s Valuable Algorithms
Analysts believe TikTok’s most valuable asset is a machine-learning platform that uses algorithms to track and identify the videos users want to watch. The algorithm identifies the videos that users are most likely to watch.
Some analysts think advertisers could use TikTok’s algorithm to market products to young people who tune out all other advertising. For example, TikTok could show a young person who enjoys watching auto videos and footage of the latest model cars.
Some analysts think ByteDance could use TikTok’s algorithm to identify products customers want. TikTok could send videos about hardware or tools to people who watch how-to videos for home improvement projects.
Chinese officials think TikTok’s AI and Algorithms are so valuable that they could block ByteDance from selling the technology to an American company. However, ByteDance is moving forward with the TikTok Global deal. That indicates ByteDance could have the Chinese government’s permission to export its technology.
Why Did Walmart & Oracle Want TikTok?
President Joe Biden has shelved the planned purchase of TikTok’s North American operations by Oracle and Walmart. But why would these companies want to buy TikTok?
New York University Marketing Professor Scott Galloway speculates that Walmart (WMT) could use TikTok’s algorithm to learn which groceries customers buy each week. Walmart could ship those products straight to customers and eliminate the ordering process.
Instead of marketing products, Walmart could offer customers a subscription to a service. The algorithm-operated service will ship customers the products they regularly buy and eliminate the need for shopping. Eliminating shopping could help Walmart make more money by reducing its expenses.
Galloway thinks Walmart plans to buy 7.5% of ByteDance’s American subsidiary TikTok Global to get access to TikTok’s algorithms. Galloway believes Walmart management plans to add TikTok algorithms to its Walmart.com eCommerce platform.
TikTok Global’s Value
ByteDance Ltd estimates TikTok’s value to be $60 billion. Investors, however, estimate ByteDance itself could be worth $100 billion.
ByteDance generated $17.20 billion in revenue in 2019, TechCrunch claims. TechCrunch claims most of ByteDance’s revenue comes from Chinese advertising sold on Doyuin and other apps.
TikTok Global will not own Doyuin or share in its revenues. Thus, there is no evidence TikTok Global will make money. TikTok Global could make money by selling its algorithms to other companies.
Analysts estimate TikTok Global’s valuation to be $60 billion. TikTok Global is a proposed U.S. company that will own TikTok’s North American operations. ByteDance will own 80% of TikTok Global.
Investing in Social Media
Making money on social media is difficult. Of the publicly traded social media companies surveyed here, only Facebook (FB) and Tencent Holdings (TCEHY) make money.
Many people will assume TikTok Global will not make money because of the track record of companies such as Snapchat (SNAP) and Twitter (TWTR). Some observers, including the management teams at Microsoft (MSFT), Walmart (WMT), Oracle (ORC), and ByteDance, think otherwise.
Investors who need stocks that pay need to avoid all social media companies except META (Ticker: META). So far, only Facebook has made money in social media in the United States.
Only time will tell if TikTok Global will change that reality and create a credible Facebook competitor.
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