On Monday, the Wall Street Journal reported that ByteDance Ltd, the company which owns the short video app TikTok, had considered a public listing offshore. However, people familiar with the matter said that the company postponed its plans after a meeting with Chinese regulators. The officials reportedly told the firm to focus its attention on data-security risks.
Recently, Didi Global Inc., the most popular ride hailing app in China, faced a crackdown after it listed on the New York Stock Exchange last month. On July 2, the company went under a cyber security review. It was not allowed to accept new users. A few days later, it was removed from app stores.
ByteDance decided to err on the side of caution late March after founder Zhang Yiming met with officials of the Chinese cyber security agency and securities regulators. People familiar with matters of the company said that its founder was considering an initial public offering (IPO) in Hong Kong or in the U.S.
ByteDance was valued at $180 billion in December in a funding round. Early this year, the Beijing-based company was considering going public with some or all of its companies. However, by late March, after meetings with officials, the company decided to put its plan of a public offering on hold; indefinitely.
Another reason for the delay in listing, according to another person familiar with matters of the company was the lack of a chief financial officer (CFO) at that period in time. However, the company hired a new CFO — Shou Zi Chew in March. He has been a former executive at Xiaomi, one of the world’s top smartphone companies.
After seeing the regulatory problems that Didi has recently faced and the problems that Alibaba faced a few months ago, tech and e-commerce companies and other Chinese based magnates are likely to hesitate and reconsider plans of listing their companies abroad.
When asked by CNBC for comment a ByteDance spokesperson told the agency that they don’t comment on “rumors” or “speculation.”