HONG KONG -- ByteDance has held talks with bankers who are eager to capitalize on a string of successful share offerings in Hong Kong by listing the Chinese owner of viral social media app TikTok in the city. The move, if it happens, could provide a valuable shot in the arm to co-investor SoftBank.
No firm date or banking mandate has yet been decided, three people familiar with the situation said, and the talks are ongoing. But ByteDance, which was valued at $75 billion in an October 2018 funding round led by SoftBank, denied reports it sought to list as early as the first quarter of next year.
Despite five months of political unrest, Hong Kong currently leads the world rankings in terms of share listings since Sept. 1, with $9.6 billion raised out of $36 billion globally, according to Dealogic data.
Listing ByteDance on Nasdaq, the most common choice for Chinese tech companies, has also been discussed as a possibility, the people said, even though such a move would likely face intense scrutiny by U.S. lawmakers.
Earlier this month, two U.S. senators requested that intelligence officials examine whether TikTok, which they claim is influenced by Beijing, is a potential national security risk. ByteDance has denied that China's communist government has any sway over content that it posts in the U.S.
Separately, the Trump administration has also said it might seek to delist all Chinese companies from U.S. stock markets amid an ongoing trade dispute between the world's two largest economies.
Any final decision on the listing could hinge on the outcome of those trade talks. Hong Kong has seen 24 IPOs since the end of August with at least another five more opening for subscription this week as the improving odds of a preliminary agreement has boosted risk appetite.
A successful ByeteDance listing could help the battered fortunes of SoftBank, which last week plowed $6.5 billion into a rescue package for loss-making office-sharing company WeWork. SoftBank's Vision Fund led a $3 billion funding round into ByteDance last November, but has declined to comment on the size or value of that investment since.
People familiar with the situation said it was too early to comment on any expected valuation if a ByteDance IPO did happen. Last year's fundraising valued ByteDance at $75 billion, making it the world's most valuable start up ahead of Airbnb and SpaceX.
However startup valuations have slipped subsequently. Shares in Uber, another SoftBank investment, have dropped by 20% since its own share sale in May. Furthermore, companies that have listed in Hong Kong since the end of August are on average trading 20% below their offer price, data from Dealogic shows.
Beijing-based ByteDance, founded by ex-Microsoft engineer Zhang Yiming seven years ago, has never disclosed its revenue, but a Reuters report has cited unnamed sources saying that ByteDance booked revenue of 50 billion to 60 billion yuan ($7 billion to $8.4 billion) in the first half of 2019, and turned profitable in June.
The company is best known for its TikTop video app, which has gone viral globally. In January alone, TikTok added more than 6 million new users in the U.S., overtaking Facebook and Instagram to become the No. 1 downloaded non-game app among American users, based on estimates of mobile app tracker Sensor Tower. Worldwide, TikTok's total downloads have exceeded 1 billion.
The Financial Times, citing two people briefed on the plans, reported Tuesday that ByteDance was planning an IPO, aiming for a listing in the first quarter of 2020. A ByteDance spokesman denied that timetable, but did not comment on whether the company might list later in Hong Kong.
Additional reporting by Coco Liu in Hong Kong