How to Buy TikTok Stock?

How to Buy TikTok Stock?

Despite the popularity and widespread user engagement of TikTok, its parent company, ByteDance, remains privately held, making direct investment in TikTok unfeasible for the general public. However, for those looking to benefit from TikTok's expansive growth and success, there are indirect investment avenues available.

TikTok, a dominant player in the realm of social media, captivates a global audience with over 1.5 billion monthly active users. Its robust presence is not only a testament to its cultural impact but also its potential as a lucrative investment target. Despite this, ByteDance has not indicated any immediate plans to go public, leaving investors to explore alternative routes for investment.

Investors can consider stakes in prominent public companies like KKR & Co. Inc. and SoftBank, both of which have invested in ByteDance, offering a backdoor pathway to align financially with TikTok's operations. This method provides a form of indirect exposure to TikTok's financial performance and market dynamics.

ByteDance's valuation was marked at a staggering $268 billion in 2023, influenced by an employee buyback program that valued a single share of TikTok at $160. This valuation reflects the immense market confidence and the potential growth trajectory of ByteDance and its subsidiaries.

As the digital landscape continues to evolve, with platforms like Facebook, YouTube, and Instagram setting the benchmark with billions of active users, TikTok's strategic positioning and innovative approach to content creation make it a noteworthy consideration for those looking to invest in the next big thing in social media, albeit indirectly.

Can You Buy TikTok Stock?

TikTok, a leading social media platform, is not directly accessible to retail investors as it is not publicly traded on any stock exchange. This means there are no TikTok-specific stock symbols, stock tickers, or share prices available to the public.

However, investment opportunities in TikTok exist through indirect means. ByteDance, the parent company of TikTok, is privately held but supported by several major investment firms that are publicly traded. By purchasing stock in these firms, investors can gain exposure to TikTok's financial performance, albeit indirectly.

One prominent method is investing in global investment companies like KKR & Co. Inc. and SoftBank, both of which have stakes in ByteDance. KKR has invested at critical junctures, such as in 2018 when ByteDance was valued at $75 billion and again in 2020 at a valuation of $180 billion. SoftBank also made a significant investment in ByteDance through its SoftBank Vision Fund during 2018. KKR is traded on the New York Stock Exchange under the ticker KKR, and SoftBank is listed on the Tokyo Stock Exchange.

For those looking at even more indirect routes, platforms like EquityBee and EquityZen offer opportunities to buy shares in privately held companies, including ByteDance, under certain conditions. This method allows investors to potentially benefit from TikTok's success while recognizing that these investments are part of a broader portfolio, which can affect overall performance due to other holdings and market dynamics.

In summary, while direct investment in TikTok is not possible, there are several strategies to benefit from its market presence and growth indirectly, similar to how investors might buy shares of Alphabet to gain exposure to Google, or invest in Meta Platforms to connect with Facebook and Instagram's economic activities.

Who Owns TikTok?

TikTok, a highly popular social media platform, is owned by ByteDance, a Chinese technology giant founded by Zhang Yiming and Liang Rubo in 2012. ByteDance, akin to how Meta Platforms (NASDAQ: META) operates Facebook and Instagram or how Alphabet (NASDAQ: GOOGL) manages Google and YouTube, serves as the parent company for TikTok. This organizational structure allows ByteDance to hold a portfolio of varied tech products under its umbrella.

ByteDance's diverse range extends beyond TikTok to include other applications and platforms like Douyin—TikTok's counterpart in China—Mobile Legends, PICO, Lemon8, and Baike.com. The company started its journey with Toutiao, a content platform that delivers news and information tailored to individual preferences through sophisticated algorithmic models.

In terms of financial stature, ByteDance has demonstrated significant market value, marked by a notable $268 billion valuation in December 2023 following a $5 billion employee buyback program. This valuation, reported by South China Morning Post, highlights the company's robust financial health, although it has achieved even greater valuations in the past, peaking above $400 billion. Such figures underscore ByteDance's dominant position in the tech industry, akin to other major conglomerates in the digital space.

Is ByteDance Publicly Traded?

ByteDance, despite its impressive valuation of $250 billion, remains a privately-held entity and is not available for public trading. This substantial valuation reflects its ownership of TikTok, among other successful digital platforms.

For investors interested in gaining exposure to ByteDance's growth, there is an indirect investment route available. The company is supported by several major investment firms, including Kohlberg Kravis Roberts (KKR), SoftBank Group, Sequoia Capital, General Atlantic, and Hillhouse Capital Group. By investing in these companies, individuals can benefit indirectly from ByteDance’s expansive digital footprint and the ongoing success of TikTok. This approach allows investors to tap into the potential of ByteDance through entities that are publicly traded and have diversified portfolios that mitigate direct investment risks.

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Is TikTok A Good Investment?

TikTok, with its global user base of 1.56 billion monthly active users, represents a highly significant investment prospect. According to Business of Apps, TikTok's revenue surged from $63 million in 2017 to an impressive $9.4 billion in 2022, reflecting robust growth and market penetration. Since its inception in 2017, the app has amassed 3.3 billion cumulative downloads, ranking it as the fifth largest social media platform behind giants like Facebook, YouTube, WhatsApp, and Instagram.

However, investing in TikTok comes with considerable risks, primarily due to its affiliation with ByteDance, a Chinese entity. The platform has faced scrutiny and regulatory challenges in several regions. Notably, TikTok has been banned in countries such as India, Iran, and Pakistan, with other nations like Belgium and Canada imposing restrictions on the app's use on government devices.

In the United States, the debate over TikTok's operation has been intense. Former President Donald Trump issued an executive order in 2020 demanding ByteDance to divest TikTok's U.S. operations, an order which was later rescinded by President Joe Biden. Additionally, over 30 U.S. states have enacted policies barring government employees and contractors from installing TikTok on state-issued devices.

Moreover, the competitive landscape is evolving. YouTube, for instance, has introduced YouTube Shorts, a direct competitor to TikTok, highlighting the ongoing innovation in the digital content space. This competitive pressure underscores the dynamic nature of the industry and the necessity for TikTok to continually innovate to maintain its market share. Thus, while TikTok's growth and revenue figures are compelling, potential investors must weigh these opportunities against the geopolitical risks and competitive threats in the digital media environment.

How To Invest In Tik Tok Stock

As a retail investor, it's not possible to directly purchase shares of TikTok as the company is not publicly listed. However, you can still gain indirect exposure to TikTok by investing in some of the private equity firms that hold stakes in its parent company, ByteDance.

Two notable publicly traded investment firms include:

  • Kohlberg Kravis Roberts (NYSE: KKR): This global investment firm, headquartered in New York, has a diverse portfolio that includes a stake in ByteDance. KKR is known for its strategic investments across various sectors.
  • SoftBank Group (OTCMKTS: SFTBY): As a major player in the tech investment world, SoftBank has been involved in funding several high-profile technology companies, such as Slack, NVIDIA, and Uber. SoftBank's investment in ByteDance adds TikTok to its broad portfolio of tech interests.

It's important to note that other stakeholders in ByteDance, such as Sequoia Capital, General Atlantic, and Hillhouse Capital Group, are privately held and thus not accessible to public investors.

If you're considering investing to indirectly benefit from TikTok's success, purchasing shares of KKR or SoftBank (SFTBY) could be a viable option. Remember, these firms have extensive investment portfolios, and owning their shares gives you exposure to a wide range of companies, not just ByteDance. It's crucial to conduct thorough research and understand the broader investment scope these firms offer before making any investment decisions.

Will there be a TikTok IPO?

Currently, there are no confirmed plans for a TikTok IPO. Speculations of ByteDance, the parent company of TikTok, considering a public offering surfaced during the Trump administration, suggesting that TikTok might be spun off as an independent entity and possibly go public. However, these plans have not been realized. In August 2022, ByteDance's CFO, Julie Gao, informed employees that the company had no immediate intentions to initiate an IPO.

As of now, there is no indication from ByteDance suggesting a shift towards an IPO for either the company as a whole or for TikTok specifically. Nonetheless, the possibility remains open in the future. An IPO would offer a significant opportunity for ByteDance investors to capitalize on their investments, considering the company's substantial valuation and the global popularity of TikTok. Therefore, while an IPO is not on the immediate horizon, it remains a potential development to watch for in the future.

How To Buy The TikTok IPO

If TikTok—or its parent company ByteDance—decides to go public via an IPO, it's important to be prepared to participate. Here's a general guide on how to buy shares if and when TikTok becomes available on the stock market:

  • Set Up a Brokerage Account: If you don't already have one, you'll need to create a brokerage account. Consider using well-known platforms such as Charles Schwab, Fidelity, or TD Ameritrade. Each offers different features, so choose one that best fits your investment style and needs.
  • Search for ByteDance or TikTok: Once the IPO is announced and available, use your brokerage platform to search for ByteDance or TikTok by its ticker symbol, which will be specified at the time of the IPO.
  • Decide on the Number of Shares: Determine how many shares you want to purchase based on your budget and investment strategy.
  • Place Your Order: Execute your order through your brokerage platform. You can choose from different types of orders, such as a market order (buy at current price) or a limit order (specify the maximum price you are willing to pay).
  • Monitor Your Investment: After purchasing shares, keep an eye on your investment. Stock prices can be volatile, especially after an IPO, so it's important to monitor the market and adjust your strategy as needed.

As of now, it is not possible to buy TikTok or ByteDance shares since neither company has undergone an IPO. Investing in an IPO involves risks and potential rewards, and it's crucial to conduct thorough research or consult with a financial advisor before participating in any IPO.

Conclusion

In conclusion, while TikTok's widespread popularity and significant user engagement present an attractive investment profile, the direct investment in TikTok remains inaccessible as its parent company, ByteDance, is privately held. This scenario leaves investors pondering how to tap into the rapid growth and success of one of the most influential social media platforms in the world.

For those looking to harness TikTok's potential indirectly, investment in publicly traded firms like KKR & Co. Inc. and SoftBank, which have stakes in ByteDance, offers a viable alternative. These firms provide an avenue for investors to gain a piece of TikTok's lucrative operations, albeit indirectly. Each investment in these firms is an investment into a portfolio that includes ByteDance among a diverse array of other assets, which could influence overall performance.

Despite no immediate plans for an IPO, ByteDance's valuation at $268 billion as of 2023 underscores the company's formidable presence and growth prospects in the digital realm. The landscape of social media continues to evolve, with platforms such as Facebook, YouTube, and Instagram defining high benchmarks. TikTok’s innovative approach and strategic market positioning ensure it remains a critical player in the evolving digital narrative, representing a noteworthy opportunity for investors to consider for future indirect investment strategies.

However, potential investors should remain cognizant of the geopolitical risks and competitive pressures facing TikTok, including regulatory challenges and burgeoning competition from platforms like YouTube Shorts. These factors necessitate a cautious approach, balancing the allure of TikTok's impressive growth against the broader market dynamics and risks.

As the digital market continues to expand, keeping an eye on ByteDance's strategic moves could provide critical insights for investors looking to capitalize on the next big wave in social media investments

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