The parent company of TikTok puts a halt to its IPO proceedings as government officials issue statements highlighting the company to address its data security risks.
ByteDance Limited, which is the owner of Tiktok, had to shelve their IPO intentions amidst data security risks that the Chinese government had issued for the company to seek redressal with.
The company had previously been looking for an initial public offering in the listings of the US and Hong Kong but had to keep their IPO proceedings aside in light of data security risks that could thwart the company’s IPO Listing plans.
ByteDance Limited Shelves Plans for IPO
The viral TikTok video giant is currently valued at $180 billion and has been constantly seeking an active public offering in the listings of USA and Hong Kong, however, the company has decided to keep its plans on a pause after receiving the data security warnings from the Chinese authorities stating that the company needs to address and revise their security guidelines.
ByteDance Founder Zhang Yiming has decided to delay their IPO listing till March after meeting with cyberspace and securities regulators in which the authorities have asked the company to revise their data security fundamentals. Later on, the company had delayed the IPO listing till March next year considering it to be a wise decision that would benefit the company’s image in future business dealings.
The growing speculations have also suggested that one of the other reasons to delay the IPO listing might be that the company does not have a chief financial officer at the time to manage the company’s financial outflows.
The decision of ByteDance Limited to delay the public offering comes at a time when another Chinese tech giant DiDi had to withdraw their app proceedings from the Chinese app market after being embroiled in a data security issue. ByteDance cautious approach to first address the warning and later apply for the listings have been deemed as a wise and sensible way to protect the company’s image and prospects.
Chinese regulations have been growing strict regarding technology and data security breaches. The authorities had previously suspended all key operations of the DiDi app in China after suspecting that the app might be leaking the data which can be later manipulated by foreign sources. Bytedance has also been issued a similar warning and is advised to revisit their security data guidelines before seeking an IPO listing in Hong Kong or US.