TikTok’s Parent Firm Incurs Mega Operating Loss Worth $7 Billion

TikTok is undoubtedly one of the most popular applications in today’s time. However, its Chinese parent firm ByteDance was witnessed incurring mega operating losses worth nearly $7 billion. The Wall Street Journal recently reported the news.

But the losses come at a time when the immensely successful global firm is seeing huge growth. Moreover, we saw the firm report a mega operating profit during Q1 of this year, and analysts concluded that the firm was undoubtedly one of the most valuable firms in terms of startups. But seeing such losses take place at this level is definitely concerning.

Other than that, we’ve seen how the firm’s financials are getting heavily weighed down thanks to billions of dollars linked to unanticipated market losses regarding convertible securities. These reports were for the years 2020 and 2021 as revealed by the news outlet.

ByteDance has been known to be keen on investing in a lot of the latest VR technology and the associated startup firms called Pico.

On average, the company’s CEO is worth a staggering $49 billion and was listed on Forbes's list of billions in real-time. This particular list was published today.

Recently, we also saw a memo that was sent out to investors. It stated how TikTok’s Chinese parent firm will be spending almost $3 billion to repurchase shares that it had sold. This would be at a price tag that would value the firm at nearly $300 billion.

All such purchases were designed mostly to assist some shareholders to get better liquidity, as recently confirmed by an insider that was familiar with the plan. He spoke to Reuters about it.

So as you can see, the losses are plenty, but some plans are definitely in place to help recover. How successful they turn out to be, only time can tell.

Photo Credit: SOPA Images/LightRocket via Getty Images

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