I am always looking for trends to invest in on the stock market. One of the big trends I see is TikTok as one of the most downloaded app for the year. Nearly every day, I get sent a video that someone has made on the platform.
This has led me to wonder is the Tiktok stock price, is a publicly traded company, or even listed on the stock market. The short answer is that Tiktok stock is owned by private equity firms, so you can’t buy it on the New York Stock Exchange. There are a couple of options to invest in through private equity funds.
TikTok is an application that is used for video creation and editing, where filters and music are used during the process. The content created can then be downloaded and shared with your followers and globally, depending on how catchy it is.
The app has become a sensation over the past two years since it was launched by its parent company, ByteDance. Though called Douyin in China, the app came to be in 2016 and has been improved to suit the global market. Its use has skyrocketed to billions of users around the world however that does not make it legal everywhere, as countries like India still have sanctions against it.
In this article, I will discuss Tiktok stock, who owns TikTok, how to invest, and other key things to consider.
Table of Contents
- 1 What is TikTok’s Net worth
- 2 What is its business model?
- 3 How do I buy TikTok Stock?
- 4 What is ByteDance company value?
- 5 Is it a worthy investment?
- 6 Investing in TikTok stock
- 7 Guide on purchasing TikTok IPO today
- 8 Factors to consider before investing in TikTok Stock
- 9 The pros and cons of investing in TikTok Stock Today
- 10 Why you must be careful when investing in TikTok Stock?
What is TikTok’s Net worth
The current value of TikTok is estimated to be around $50 billion, with its founder company ByteDance worth $300 billion. Its founder Zhang Yimming founded the app in the year 2012, and his life has changed since then as a software developer to become the 22nd richest man on the planet. The company enjoys a 70% increase in revenue yearly, with ByteDance generating approximately $58 billion in 2021. Since its launch, the app has been downloaded three billion times and has remained with high traffic of users, amounting to over 1.2 billion active users every month.
What is its business model?
The business model TikTok uses is the integration of the creation and sharing of useful and catchy content to different target audiences. The app bears elements of Facebook, YouTube, and Instagram, which is why it has become the most used social media app on the planet. Its most unique feature is its algorithm which has proven to be effective in predicting the content for users to enjoy.
The artificial intelligence features make it one of the apps that are the fastest in learning about the users. The mission and target of TikTok as a company is to capture and present the creativity, knowledge, and precious moments straight from your smartphone.
TikTok is also not unanimously accepted globally, which has brought changes to its regulations and framework to suit foreign countries. This has, however, not affected its ability to compete effectively in its niche with competitors like Instagram, Snapchat, and YouTube.
How do I buy TikTok Stock?
TikTok is not a publicly traded company; owned by ByteDance, a privately held Chinese technology company established in 2012. You cannot buy TikTok stock directly but ByteDance being the parent of TikTok allows you to purchase stock through a number of platforms set up online today. Since TikTok is not publicly traded, it cannot be listed on the stock exchange for you to purchase its stock directly. You can be sure there is no TikTok stock name, no price per share, and no TikTok stickers, which is why you must research before investing in TikTok stock.
What is ByteDance company value?
The actual value of ByteDance is approximated to be about $250 billion. It is backed by a number of institutions like Kohlberg Kravis Roberts, SoftBank Group, Sequoia Capital, General Atlantic, and Hillhouse Capital Group. This means anyone intending to purchase stock can do so by investing in these firms as a way of investing in TikTok shares.
This technology company has been established to be the parent of TikTok, a viral app with more merits than cons. To understand whether or not you can invest in the subsidiaries of the firm, you must first understand important management details about it. The company was founded by Yiming Zhang, who is also the current CEO of the company. It is headquartered in Beijing, China, and its net worth with regards to TikTok alone has grown to $50 billion, making it one of the ideal firms to purchase stock in.
TikTok boasts the highest number of social media users around the world, with a staggering amount of 1 billion users. There are other social media platforms that record high users data however since they are never publicly traded companies, purchasing stock in them is slightly hard until when they are in the form of IPO.
Is it a worthy investment?
There is no denying the huge success that TikTok has received since it was established in the year 2020. ByteDance is the parent company behind it and was started in the year 2012. Now that both ByteDance and TikTok have been listed as privately held companies investing in them indirectly would still make a lot of sense. ByteDance has definitely steered the growth and attention brought by TikTok to the right wavelength making the app a global success that many investors want to be a part of.
The app keeps on growing, which makes it the perfect advertising platform for businesses that want to target the vast traffic presented online. There are different ways that TikTok makes money mainly from its five advertisement categories, including in-feed ads, branded effects, Top View, and branded hashtag challenges. Businesses feel inclined to choose one marketing venture from the list, which has been part of the many ways TikTok revenue is generated.
Investing in TikTok stock
Now that you have figured out the diverse private equity companies related to TikTok, investing in them remains an ideal way to purchase or up your TikTok stock. Though denied the opportunity to become a direct retail investor, these companies allow you the opportunity to invest in ByteDance Company which is TikTok’s parent.
To purchase your stock, here are some of the main companies you can choose.
1. Kohlberg Kravis Roberts – a New York investment firm with global operations. It is headquartered in New York and has ByteDance as one of its clients with several portfolio investments. You can purchase as much stock from the equity group as your budget allows for you to be part of the larger TikTok public owners.
2. SoftBank group – this is an investor in technology companies that has their hands in many trades. They hold stock in Uber, NVIDIA, and even slack, besides TikTok, your main target. Purchase your TikTok stock from SoftBank group to increase your TikTok ownership and also make returns as the platform’s use increases over time.
Guide on purchasing TikTok IPO today
Investors cannot tell whether the parent company of TikTok or the platform itself will become publicly traded at some point. The only way to anticipate such is to make the right preparations for when either of them does go public. TikTok shares or stocks cannot be purchased until they are IPO, which amateur and potential investors should note. Here are some useful tips you need to keep in mind when purchasing TikTok shares today.
- Create your brokerage account and login
- Step Find ByteDance or TikTok on the account
- Determine the amount of stock or shares you want to purchase
- Find ByteDance or TikTok on the account
- Determine the amount of stock or shares you want to purchase
- Place your order
- Start monitoring your trade closely
Factors to consider before investing in TikTok Stock
1. Reputation is key
You definitely need to be cautious about your investment portfolio expansion as you plan for the future. ByteDance is one company where you can invest in TikTok stock but have you assessed the reputation of the business over the past few financial years? TikTok is not a blue-chip stock as you anticipate, which is why you must bury yourself in research to avoid scandalous investment moves.
2. Security concerns
Are you buying stock in the right company? Your safety and that of your stock have to be prioritized by ByteDance. TikTok has, for instance, been banned in some countries for a number of reasons, including potentially leaking user information to the app management center. This has raised questions in the United States and parts of India as to whether it is safe to purchase stock in the same
3. Private or public company?
Before you purchase TikTok stock, you ought to understand how it works. ByteDance is not a publicly held or traded company, and that brings in some changes to how operations are to be done. You, for instance, should not expect to have access to quarterly earnings as expected in publicly traded companies. Other financial disclosures can also be kept from you during a financial year as that is how privately held firms work.
You should know before investing that TikTok is one of the apps that solely exist in the high-risk/high-reward section. This is due to the combined high valuation and projected growth and earnings over the years.
5. Time horizon
Any investment plan is best tied to time duration before it is executed. When purchasing TikTok stock, you need to be certain of how long you will be trading the stock. Short-term horizon is anything under a year where you purchase and hold stock for the said duration. Medium entails holding stock for years not exceeding 10. The long-term option entails holding stock for more than 10 years. Once you determine the duration, you can make up your mind on the amount of stock to budget for.
6. Your investment strategy
There are different investment strategies to use; you just have to find the one that suits your style and budget. Value investing is one of the many options you look at where you invest in undervalued stock to generate gains. Income investing is another option where you invest in a stock that can generate huge dividends from which you will get the income to reinvest. Lastly, you can choose to go for growth investing which is when you invest in a stock that depicts market-beating growth when projected as revenue and earnings from the same.
The pros and cons of investing in TikTok Stock Today
Over the past few years of its launch, TikTok has surpassed many social media apps and platforms to become the leader in the niche. Many people are investing in TikTok stock for a number of reasons that begin with what the app has achieved in the past years. The app has gained popularity among regular social media users and businesses that seek to augment their traffic, sales and returns.
Its potential future makes it an ideal IPO investment should you choose to purchase it through investor companies. Here are some main reasons why people want to invest in TikTok today.
The app is engaging
It is true that TikTok remains one of the most used apps on the platform thanks to its unique algorithm that can learn what you love and keep you glued to the screen. It is the addictive nature of the app which makes it hard to quit and probably one of the best platforms to get knowledge and entertainment from. It has been introduced and expanded to over 150 markets around the world with the statistics projecting immense future growth.
Constant improvement and growth
Since its launch in the year 2020, TikTok may as well be the leading social media platform as you will realize. As more people register with the app to become content creators, new guidelines are formulated every time. There are, therefore slight improvements and safety concerns that are made to make sure users are fed with the right content based on their taste. Users also get new guidelines on what can and cannot be shared to limit the spread of negative content.
The parent firm’s valuation
With over 1 billion users, the platform’s value has increased massively since its launch. ByteDance, the parent company of TikTok was recently estimated to be valued at $400 billion even though it is a private company. You must make an effort to know the company’s real value before you decide whether or not you will purchase the stock.
The speculation alone on ByteDance Company offering IPO has been loud, however, without any backing, but still knowing the future of the company can help you plan better. Will it ever be traded in the market publicly or will it remain a privately held firm? This is a question you need to answer before you decide whether or not to proceed with the stock purchase. The recent regulatory uncertainties in China make it hard to determine when the IPO plans can resume for the TikTok parent company.
Why you must be careful when investing in TikTok Stock?
Like all things, TikTok has a downside: you must know if you are considering taking a huge risk worth of investment. The truth is the app has had a number of controversies from when it was launched, but the few cons should help you weigh whether investing in its stock will work out positively in the long run. These are some reasons why investors may be scared to invest in TikTok Stock in the market today.
Increasing bans and restrictions
TikTok is not a major success in all countries, as there are areas where its use is still restricted. With lots of countries banning or trying to ban TikTok, it becomes hard to trust whether investing in it is the right decision. Among the countries that have pioneered banning the use of the app include China and India, even though the United States attempted it only to revert it later after authorization from President Donald Trump. The more countries find reasons to curtail the growth and use of TikTok the lower its use will be compared to competitor projections in the coming years.
Increase in competitors
As much as TikTok has carried the day in terms of social media traffic, there are also other platforms that are competing stiffly for the top position. Before making any TikTok stock investment, consider the competition factor affecting the platform’s general use. TikTok’s main competitors include Instagram which doubled down to improve video features on the app and Snapchat who have finessed their snaps or video formats to be even more appealing to its target audience.
Privacy and safety concerns
Privacy and safety concerns for TikTok users have always been an issue, especially in parts like the United States and India. Different communities and organizations worldwide have lashed at Bytedance for the potentially poor use of data collected on the app. This has negative implications for the app’s future projections, which is a factor of consideration before you make any massive investment into the mother company ByteDance.