Photo credit: Markus Spiske
TikTok owner ByteDance is allowing some US-based employees to cash out shares ahead of an IPO.
The report of Reuters says the move aims to “appease restless employees who have been waiting for an IPO to benefit from the shares they were given as part of their pay.” It also suggests that an IPO by the Chinese tech giant could be much further in the future than anticipated as regulatory oversight over TikTok and its data practices continues to simmer in the background.
ByteDance previously specified a “liquidity event” such as an IPO or sale of the company as a condition of vesting. Once the shares have vested, employees can exchange them for cash as part of ByteDance’s share buyback programs. Employees were notified of the new policy change on Tuesday, but ByteDance declined to publicly comment on the change. The move affects all ByteDance employees in the US, including more than 7,000 at TikTok.
“Our goal is to provide competitive rewards to our employees,” a spokesman for ByteDance told Reuters. “We have announced an internal solution that will allow our US-based employees to participate in future share buyback programs.”
ByteDance initiated its share buyback programs for its global employees in 2017, with the latest round taking place in April 2023. The programs were previously unavailable to employees without fully vested shares. According to the same sources, ByteDance is planning another share buyback program in Q3 2023. Employees own 20% of ByteDance, while founders own 20% and global investors own the remaining 60%.
The social media app TikTok has more than 150 million active monthly users in America alone. But it faces regulatory scrutiny in the form of bans, like the Montana ban, which the company is actively fighting to enact. Meanwhile, several branches of the US military and Congress have banned the social media app on US government-issued devices.