What’s Going On Here?

ByteDance – the parent company of TikTok – is not only the most valuable startup but is also wildly profitable.

What Does This Mean?

ByteDance more than doubled its revenue to $17 billion in 2019, while also recording a profit of $3 billion, beating YouTube’s $15 billion revenue and closing in on Instagram’s $20 billion hauls. Even more promisingly, the figures are from before COVID lockdown, after which the stay-at-home practice has induced even more new users.

Why Should I Care?

For markets: A Chinese star.

• TikTok is the first Chinese-built app to break out among western users. ByteDance has enjoyed success in China for years with news service Toutiao and Douyin, but it wasn’t until its 2017 purchase of Musical.ly that the company finally reached a global audience.
• Analysts now reckon Bytedance would be valued at up to $180 billion if it sold shares in an IPO. It’s probably not in any rush: the company’s reportedly sitting on $6 billion in cash.

The bigger picture: Locking down your dollars.

• As people spend more time at home these days, a new economy is emerging.
  • Comfort foods are doing well, with Papa John’s and Domino’s Pizza both reporting increased sales,
  • while TV-streaming is booming.
• And the demand for consumers’ downtime is fiercer: AT&T is the latest to try its luck with the launch of HBO Max.

Content source: Finimize. (2020) Tok The Tok. Available at: https://www.finimize.com/wp/news/tok-the-tok/ [Accessed on May 28, 2020]