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Bulletins

ByteDance shelved its IPO after regulatory inquiries

ByteDance shelved its IPO after regulatory inquiries

An image of ByteDance on a smartphone.

(Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)

According to reporting from The Wall Street Journal, Chinese tech giant ByteDance decided to delay its much-anticipated IPO earlier this year at the urging of regulators in Beijing.

The firm, worth at least $180 billion per a recent funding round, was mulling an offering in the United States or Hong Kong but paused after Chinese officials asked the company to look into data security risks, the Journal reports.

ByteDance's path offers a marked contrast with ride-hailing giant DiDi, which reportedly went ahead with an IPO on the New York Stock Exchange in early July after being urged by the country's Cyberspace Administration not to proceed. Following DiDi's market debut, the Cyberspace Administration of China began an investigation into its data security and ordered it to halt new user registrations in China.

According to reporting by the Financial Times, other Chinese tech companies who have delayed, reconsidered or canceled U.S. IPOs due to regulatory pressure include fitness tech company Keep, medical data company LinkDoc Technology and podcasting platform Ximalaya FM.

Protocol wrote on July 7 that following DiDi's post-IPO treatment at the hands of Chinese regulators, "Chinese firms that list stateside in the future will face higher legal and practical hurdles to convince U.S. investors and exchanges they aren't going to become 'the next DiDi.'"

The chill in overseas IPOs from Chinese tech firms could be a boon for Hong Kong. A source familiar with Ximalaya told the Financial Times that a listing there "would be regarded as a preferred outcome" for the company, which filed a preliminary prospectus with U.S. regulators in early May.

David Wertime

David Wertime is Protocol China's former executive director. David is a widely cited China expert with twenty years' experience who has served as a Peace Corps Volunteer in China, founded and sold a media company, and worked in senior positions within multiple newsrooms. He also hosts POLITICO's China Watcher newsletter. After four years working on international deals for top law firms in New York and Hong Kong, David co-founded Tea Leaf Nation, a website that tracked Chinese social media, later selling it to the Washington Post Company. David then served as Senior Editor for China at Foreign Policy magazine, where he launched the first Chinese-language articles in the publication's history. Thereafter, he was Entrepreneur in Residence at the Lenfest Institute for Journalism, which owns the Philadelphia Inquirer. In 2019, David joined Protocol's parent company and in 2020, launched POLITICO's widely-read China Watcher. David is a Senior Fellow at the Foreign Policy Research Institute, a Research Associate at the University of Pennsylvania's Center for the Study of Contemporary China, a Member of the National Committee on U.S.-China Relations, and a Truman National Security fellow. He lives in San Francisco with his wife Diane and his puppy, Luna.

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