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TikTok parent company ByteDance delayed IPO following Chinese regulatory warning

ByteDance took heed of the ongoing Chinese crackdown on cybersecurity and put aspirations of an IPO on the backburner.
TJ Denzer
TJ Denzer
1

As China’s market and cybersecurity regulators crack down hard on a variety of online companies and corporations that operate both at home and overseas, one company that managed to apparently avoid the fracas was TikTok owner ByteDance. While the company was seemingly moving towards the possibility of an IPO in U.S. markets, it took note of a warning from Chinese regulators ahead of the ongoing government efforts and put those plans on hold for the time being.

ByteDance’s decision to back off of an IPO in accordance with government regulatory warnings was shared recently by the company, as reported by Wall Street Journal. The TikTok owner was reportedly told by the government to focus its efforts on addressing data risks in the company’s servers, which company founder Zhang Yiming chose to heed. Sources familiar with the matter reported that Yiming had a meeting with cyberspace and securities regulators in which the suggestion of data security was offered, and so the company put IPO plans aside for the time being to focus on the matter.

Unlike ByteDance, Didi Chuxing (DIDI) fell under similar warning, but still chose to go ahead with its IPO, which has led to regulatory pressure and a steep drop in stock value since entering the market.
Unlike ByteDance, Didi Chuxing (DIDI) fell under similar warning, but still chose to go ahead with its IPO, which has led to regulatory pressure and a steep drop in stock value since entering the market.

ByteDance’s last valuation put the company at $160 billion USD, but its caution has proven to be fruitful. In contrast, we recently saw rideshare app giant corporation Didi Chuxing (DIDI) choose to go ahead with an IPO. However, immediately following and apparently despite warning, cybersecurity regulation hit Didi Chuxing incredibly hard, putting a hard stop on new downloads of the company’s app by new customers while regulators carried out a review of the company’s security, causing share valuation to immediate suffer as a result. Likewise, Tencent also got caught in market regulation when it tried to merge video game streaming platforms Huya and DouYu. Regulatory review ended up with a decision that it would block the merger from happening.

Cybersecurity and market regulation seems to be vehemently cracking down on a wealth of freeroaming corporate giants as of late. It seems ByteDance has made the right call in the time being to ride things out, and it will remain to be seen if the company picks its efforts to pursue an IPO back up later.

Senior News Editor
Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.

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