ByteDance plans $6bn share buyback at about $400 billion valuation, up 20% in a year

The buyback gives a fresh benchmark for valuing Chinese tech and large private AI-linked companies. That could support sentiment toward listed Chinese internet peers and toward investors with ByteDance exposure, such as SoftBank. A 20% rise in the company’s own valuation suggests management is confident in its advertising and AI businesses despite the geopolitical risk around TikTok. Setting the price below some secondary-market marks also suggests a conservative approach, which may limit how far the news lifts valuations of comparable companies.-Earlier:Anthropic IPO targets around $1 trillion valuation, half the $2 trillion once whispered- ByteDance is raising its own valuation by a fifth to about $400 billion but still pricing below what some outside investors have paid, a confident but cautious mark for one of the world’s biggest private companies.Summary:ByteDance plans to buy back up to $6bn of shares from existing investorsThe buyback values the company at about $400bn, around 20% above the valuation used a year agoValuations in past buybacks have risen steadily, from about $268bn in late 2023 to around $330bn last yearA minority-stake deal late last year reportedly valued ByteDance at about $480bnThe buyback gives investors a way to cash out of a company that has never listed ByteDance, the Chinese owner of TikTok, plans to buy back up to $6 billion of shares from existing investors at a valuation of about $400 billion, The Information reported, citing a letter to shareholders and a person familiar with the matter. That is about 20% above the valuation used in the company’s previous buyback a year ago.The rise fits the company’s recent pattern. ByteDance runs regular buybacks, which are a rare official price for one of the world’s most valuable private companies. Earlier reports show that price climbing steadily: from about $268 billion in late 2023, to around $300 billion a year later, to roughly $330 billion in last year’s round.Even so, the new figure is below some outside valuations. A minority-stake deal late last year reportedly valued ByteDance at about $480 billion. That suggests the buyback price is set cautiously compared with what some investors have been willing to pay.For shareholders, the buyback is a way to cash in their stake in a company that has never listed. The valuation reflects the strength of its core advertising business and growing interest in its AI work, including its Doubao chatbot.The deal also comes in a busy week for AI valuations, with Anthropic set to price its IPO next week at around $1 trillion. Taken together, the two show how far private tech valuations have run. They also show how differently investors value an established profit-making platform and a fast-growing AI developer.  This article was written by Eamonn Sheridan at investinglive.com.