TikTok owner ByteDance increases price of stock option buyback

ByteDance, TikTok’s Chinese owner, is starting a second stock option buyback for employees this year at a higher price than the previous one. This move aims to motivate staff amid slowing growth and uncertainty over a plan to go public. ByteDance told employees in an email that those eligible can apply to cash out their Restricted Stock Units (RSUs), ByteDance’s stock option programme. It offered USD 155 per unit, up from the USD 142 price set in the buyback earlier this year.

However, ByteDance did not immediately respond to a request for comment. It is unknown how many RSUs have been issued or how much ByteDance has set aside for the buyback. ByteDance has launched various incentive plans this year, including stock option granting programmes at a lower price amid slowing revenue growth, which fell to 70 per cent last year from more than 100 per cent a year earlier.

The economic slowdown in China is due to stringent COVID-19 curbs, and Beijing’s regulatory crackdown on the tech sector has crimped earnings and valuation prospects for many Chinese tech firms. Founded by Zhang Yiming and Liang Rubo, the company usually launches stock option buybacks twice a year for employees. Headquartered in Beijing, ByteDance has explored conducting an initial public offering (IPO) in Hong Kong. The firm reportedly launched a share buyback last month that will see it spend up to USD 3 billion in repurchasing shares from its investors, which valued the company at up to USD 300 billion.