TikTok IPO: 3 things you must know before the company goes public
With investors eagerly awaiting a 2020 IPO, we take a look at some of TikTok’s most important metrics.
The premise of the TikTok app is deceptively simple: users create and share short videos with one another, primarily for entertainment purposes.
And though TikTok – owned by the China-based ByteDance – has many Western counterparts, the app has still proven incredibly popular on a global scale, carving out a strong audience, particularly amongst younger generations.
This rising popularity has caused many to speculate when (TikTok) ByteDance would pursue an IPO, with the public currently awaiting a 2020 listing.
On this front and as IG’s Chief Market analyst, Chris Beauchamp recently pointed out:
‘ByteDance is, according to the media, the world’s most valuable start-up, with suggestions of a $75 billion price tag doing the rounds.’
Looking at some of the key statistics behind the company – with a focus on the TikTok app in particular – one sees why such a valuation may potentially be justified.
Total downloads at a glance
The TikTok app – launched in just 2017 – has already gained significant popularity, hitting a staggering one billion downloads this February.
Maybe more impressively however and according to Oberlo: TikTok was the most downloaded app on the entire Apple app store in the first-quarter of 2019, leading even the likes of the ever-popular YouTube, Instagram, Facebook and Snapchat.
Monthly active users in focus
Besides overall downloads, TikTok has already established a consistent user-base who regularly return to the app.
Quantifying this appeal and according to Datareportal, TikTok currently has a 500m active monthly users (MUAs) – all across the globe.
Comparing this against some of the other social media juggernauts and in terms of monthly active users we see that Facebook has 2.4bn MUAs, YouTube 1.9bn, WhatsApp 1.5bn, Twitter 330m and Snapchat 301m – according to dustinstout.com.
TikTok IPO: key fundamentals
Though these user-centric metrics are impressive, the company remains loss-making – though continues to anticipate strong top-line growth.
According IG’s Chief Market analyst, Chris Beauchamp:
‘ByteDance said that it was loss-making in the first half of 2019, although the firm said it made a profit in June and was confident of becoming profitable in the second half of the year.’
Speaking of valuations, Mr Beauchamp continued by noting that:
‘2018’s revenue figure was $7.2 billion, which would put the firm on a multiple of around 10 times revenue. The firm plans to double this revenue, but it is not clear how this is to be achieved.’
Watch this space.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.