How to Invest in TikTok Stock?

TikTok is the latest social media sensation. It’s a viral phenomenon that’s clearly here to stay, and it’s built a massive amount of revenue in just a few short years. If you want to invest in TikTok stock, learn more below!

If you’re wondering how you can participate in the explosive growth of TikTok, you’re not alone. But, does TikTok have a publicly traded stock? If not, is it possible to invest in TikTok? This article will explore those questions and more.

The basics: What is TikTok?
In case you’ve been living under a rock for the last few years, TikTok is the fastest-growing new social media application. It’s a video-sharing platform that allows its users to create short videos or trim videos online that are usually set to music. Often, TikTok videos include choreographed dancing, lip syncing, and comedy.

TikTok has also been heavily associated with activism among young people. It has allowed several grassroots movements to start and spread like wildfire among users of the application. 

Who created TikTok?
The TikTok application was created by a Beijing, China-based company called ByteDance. This company was founded in 2012 and has struck technology gold with TikTok. The app is a rebranded version of the Chinese app, Douyin, which is also owned by ByteDance.

They have been recruiting heavily to fill out US-based marketing, sales, and operations positions recently. In fact, Kevin Mayer, the former Chairman of Disney’s streaming division has left to be the new US CEO of TikTok. 

What makes TikTok so viral and successful?
The key to TikTok’s success has been establishing itself as a home for young people online. It’s fun, easy to use, and includes features that allow content creators (ie. users of the app) to explode in popularity. The key is the app’s use of machine learning to analyze users’ preferences and serve them content that they’re likely to enjoy and interact with. 

What is the history of TikTok?
TikTok was first launched in 2017 and rapidly became popular. It became the #1 most downloaded app in the United States for the first time in October of 2018. It was the first Chinese-made application to achieve this milestone.

Other social media apps have taken notice, with Facebook launching “Reels” on Instagram’s platform in South America. This is essentially a TikTok clone. 

How does TikTok make money?
TikTok makes money by selling advertising on its platform. This is similar to how most other social networking companies make money, and it’s extremely lucrative. 

Is TikTok profitable?
Yes! With approximately 1.5 billion monthly active users across the TikTok and Douyin platforms, Bytedance was able to take in US$17 billion in revenue in 2019 with a net profit of about US$3 billion. 

Top 10 TikTok Facts you should know:

  1. TikTok has over 2 billion downloads on the Google Play and Apple App Stores.
  2. TikTok has 689 million monthly active users as of January 2021! That doesn’t include the 600 million+ monthly active users in Douyin, the Chinese name for TikTok that’s also owned by parent company ByteDance. 
  3. 90% of TikTok users are on the app multiple times per day.
  4. TikTok users spend an average of 52 minutes per day on the app. That’s more than Snapchat, and almost as much as Facebook.
  5. TikTok is the most downloaded app on the Apple App Store
  6. TikTok is incredibly popular among young people. In fact, 62% of TikTok users in the US are 10-29 years old, while only 7.1% of them are over the age of 50.
  7. Adult use of TikTok is rapidly increasing.
  8. TikTok is extremely popular internationally. Millions of downloads come from Brazil, Mexico, and Russia.
  9. TikTok is available in 155 countries around the world.
  10. Over 1 billion videos are viewed on TikTok per day!

How to Invest in TikTok Stock:

How can I invest in TikTok stock?
TikTok is owned by the Chinese company ByteDance, which is still privately held. It is not currently traded on any stock market, though an IPO is being speculated. If you would like to invest in TikTok stock, keep your eyes out for an IPO soon. This page will be updated when an IPO is announced.

When will TikTok / ByteDance IPO?
It’s difficult to predict with certainty when TikTok’s owner, ByteDance, will IPO. They have been taking steps indicating that an IPO is likely though. One recent example is the hiring of former Xiaomi executive Shou Zi Chew as the company’s new CFO.

This may indicate that TikTok will IPO on the Hong Kong stock exchange, though most analysts expect that the company will IPO on the New York Stock Exchange.

What is TikTok / ByteDance’s valuation?
Unnamed TikTok employees recently said the company’s internal employee stock program puts ByteDance’s valuation at around $300 billion. That’s a massive increase over the already staggering $100 billion that ByteDance was valued at in the first part of 2020.

Are there any other ways to invest in TikTok stock?
The only other way to invest in a private company is to be an Accredited Investor – that is, an individual with a high net worth ($1 million or greater, not including your primary residence), or high income ($200,000 per year for three of the last 5 years).

With Accredited Investor status, you can invest in private businesses like TikTok, and join hedge funds, or venture capital funds. 

There are several options for those hoping to invest in TikTok stock who are Accredited Investors. Secondary market platforms that allow investors and employees to sell their shares in private companies exist. Examples of these platforms are EquityZen and ForgeGlobal.

Those who own stock or stock options in private companies like TikTok can go to these platforms to sell their equities. 

Conclusion: TikTok is owned by a private Chinese company, so investing in TikTok stock will be difficult for most people. If you’re an accredited investor, you can check secondary market platforms like EquityZen and ForgeGlobal to try to get in before the company IPOs.

It’s likely that with TikTok’s explosive growth that an IPO from the parent company, Bytedance will be coming in 2021 or 2022. TikTok’s valuation is also incredibly high, so investors should use caution – other high-tech companies have had difficult IPOs when valuations are so high as much of the professional investor community may think it’s over-valued.