While waiting for her order, Emily was sitting with her friends at a coffee shop, casually scrolling through TikTok. Over the past few years, TikTok has become her favorite app, where she finds everything from cooking tips to the latest dance challenges. As she watched the latest viral trend, a thought struck her: Could she buy stock in TikTok? She had invested in other tech stocks like Meta (Facebook) and Snap (Snapchat) and saw solid returns as social media grew in popularity. However, TikTok seemed different—this app was changing the way people created, consumed, and shared content at an unprecedented rate. She imagined the potential of investing early in a company with that kind of influence. Intrigued, she decided to dig deeper to find out if investing in TikTok was possible and what it could mean for her portfolio.
TikTok: A Brief Background on the Global Phenomenon
TikTok was launched by the Chinese tech company ByteDance in 2016 under Douyin in China. The app was later rebranded as TikTok for international markets in 2018 and quickly became a global sensation, particularly among younger audiences. According to Sensor Tower, by 2023, TikTok had been downloaded over 3.5 billion times, making it one of the world’s most popular social media platforms (Sensor Tower, 2023). The app’s growth has increased, reaching a billion monthly active users faster than Instagram or Facebook.
TikTok’s success is largely due to its highly engaging, algorithm-driven content, which delivers personalized videos to users based on their interests. As a result, it has become a major competitor to other social media giants and a highly attractive platform for advertisers. However, despite its popularity, one thing sets it apart from Facebook, Twitter, and Snapchat: it is not publicly traded, which means there is no TikTok stock that investors like Emily can buy directly.
Who Owns TikTok?
TikTok is owned by ByteDance, a private Chinese company headquartered in Beijing. ByteDance was founded by Zhang Yiming in 2012, and over the years, it has grown into one of the world’s most valuable tech companies. As of 2023, ByteDance was valued at around $300 billion, according to Bloomberg (Bloomberg, 2023). This valuation places it among the top privately held companies globally, alongside giants like SpaceX.
ByteDance’s ownership has caused some controversy, particularly in the United States, where there are concerns about data privacy and the potential influence of the Chinese government. This has led to discussions about ByteDance potentially spinning off TikTok into a separate, publicly traded entity. However, no concrete plans for an IPO have been announced as of yet.
Can You Buy TikTok Stock?
Currently, you cannot buy TikTok stock directly because ByteDance, TikTok’s parent company, is privately owned. However, investors can indirectly gain exposure to TikTok’s success in some ways.
- Investing in ByteDance (Private Market)
- ByteDance has raised billions from private investors, including well-known firms like Sequoia Capital, SoftBank, and General Atlantic. However, buying ByteDance stock is challenging for the average investor because it is limited to private equity markets, where shares are typically restricted to institutional investors or high-net-worth individuals. According to PitchBook, ByteDance’s last funding round in 2022 was at a valuation of around $300 billion, and private market shares have sometimes traded in secondary markets. However, these opportunities are rare and often inaccessible to regular investors (PitchBook, 2023).
- Investing in Companies with Exposure to TikTok
- Another way to potentially benefit from TikTok’s growth is to invest in companies that partner with or benefit from TikTok’s success. For example:
- Alphabet (Google): TikTok’s massive growth has spurred competition from YouTube, particularly with YouTube Shorts, its answer to short-form video content. Google’s advertising revenue is influenced by how it competes with TikTok, indirectly making it a way to invest in social media video trends.
- Meta Platforms (Facebook): Facebook and Instagram have heavily invested in Reels to compete with TikTok. Meta’s growth and ad revenue depend, in part, on how well it can retain users against TikTok.
- Oracle: In 2020, amid U.S. regulatory concerns, ByteDance agreed to partner with Oracle to store TikTok’s U.S. user data domestically, making Oracle a significant infrastructure partner for TikTok in the U.S. While the partnership does not directly translate to profit from TikTok’s growth, it ties Oracle’s fortunes somewhat to the app.
- Social Media ETFs
- Some exchange-traded funds (ETFs) provide exposure to the social media sector, indirectly benefiting from trends driven by TikTok. Funds like the Global X Social Media ETF (SOCL) include companies such as Meta, Snap, and Alphabet, which compete in the same space as TikTok. This type of investment spreads risk across multiple social media companies.
Will TikTok Go Public? IPO Rumors and Speculation
Whether ByteDance will take TikTok public has been circulating for years. In 2021, ByteDance was reportedly exploring an IPO, but plans were delayed due to regulatory pressure from both Chinese and U.S. governments. The government has tightened its grip on data privacy and tech companies in China, impacting ByteDance’s ability to list internationally. In the U.S., there were concerns about data security, particularly with TikTok’s access to American user data.
As of 2023, there has been renewed speculation about a potential IPO. According to The Wall Street Journal, ByteDance was considering an IPO for its Chinese assets but remained cautious about listing TikTok internationally due to geopolitical risks (The Wall Street Journal, 2023). If ByteDance eventually decides to go public, it could be one of the largest IPOs in tech history, potentially comparable to Alibaba’s $25 billion IPO in 2014.
The Financial Impact of TikTok on the Social Media Landscape
TikTok has disrupted the social media space and impacted how companies allocate advertising budgets. According to Insider Intelligence, TikTok’s global ad revenue reached $9.4 billion in 2023, an 18% increase from the previous year (Insider Intelligence, 2023). TikTok’s growing share of ad revenue has come at the expense of established platforms like Facebook and YouTube, as brands recognize TikTok’s unique ability to engage young, active users.
Additionally, TikTok has had a profound impact on trends in content consumption. A Pew Research Center study found that 67% of U.S. teens now use TikTok, and 16% say they are on the app “almost constantly” (Pew Research Center, 2022). This rapid shift in where young people spend online has forced competing platforms to adapt their strategies and invest in similar features to stay relevant.
Case Study: TikTok’s Role in Boosting Brand Visibility
TikTok has become an essential platform for brand marketing, especially for companies targeting Gen Z. A notable example is e.l.f. Cosmetics saw a 32% increase in brand engagement after launching a TikTok hashtag challenge called #EyesLipsFace. This campaign generated over 5 million user-generated videos and amassed over 1 billion views (Adweek, 2023). TikTok’s format allows brands to connect with consumers uniquely and personally, something that traditional ads on other platforms often struggle to achieve.
For investors, this shift in advertising dollars toward TikTok clearly indicates the platform’s influence in the digital ad space. However, it is difficult to capitalize on its growth without a publicly traded TikTok stock.
Final Thoughts: Is Investing in TikTok’s Parent Company Worth the Wait?
For investors like Emily, waiting for a TikTok IPO might be frustrating, but ByteDance’s value is likely to continue growing due to TikTok’s sustained popularity. The social media landscape is shifting, and TikTok has become a key player. If ByteDance eventually offers an IPO, it could be a major opportunity for investors to get involved with one of the fastest-growing social platforms in history.
In the meantime, investing in companies that benefit from or compete with TikTok—such as Alphabet, Meta, or Oracle—can indirectly expose the platform’s influence on the market. For those willing to wait, a future IPO could present a chance to finally invest directly in TikTok’s extraordinary growth.
