Report: Operating loss at TikTok parent ByteDance topped $7 billion last year

The operating losses at ByteDance, the Beijing-based parent company of the hugely popular video-sharing website TikTok, more than tripled to more than $7 billion last year, according to a financial report sent to staff, the Wall Street Journal reported today.

The losses were generated as one of China's most prosperous international companies paid to maintain its expansion, the newspaper reported. According to the article, one of the most valuable startups in the world, ByteDance, declared an operating profit in the first quarter of 2022, "showing one of the world's most valuable companies could be turning a corner after years of incurring massive losses."

However, "tens of billions of dollars in unrealized market losses on convertible instruments" have hurt ByteDance's financial performance, according to the Journal. The shared financial reports included the 2019 and 2020as well as the first quarter of 2022, according to the newspaper.

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The 2012-founded, privately held ByteDance, best known in China for its Douyin short-video website, has made a major investment in the virtual reality startup Pico. (This is a linked post.) According to the Forbes Real-Time Billionaires List as of right now, ByteDance's principal creator Zhang Yiming is projected to be worth $49 billion. The estimated net worth of CEO Liang Rubo is $2.3 billion. Additionally, funds connected to Sequoia Capital China, Softbank, Coatue, General Atlantic, and Source Code Capital are shareholders in ByteDance.

Reuters reported last month that ByteDance will spend up to $3 billion to repurchase shares at a price that values the business at about $300 billion, citing a corporate note to investors. According to a source with firsthand knowledge of the strategy who spoke to Reuters, the acquisitions were primarily made to assist particular shareholders in increasing their liquidity.

(With inputs from agencies)

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