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TikTok has recently traded at valuations of $105-110B on private markets

bloomberg.com

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Re: TikTok has recently traded at valuations of $105-110B on private markets

#41

Post by vander »

sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

The valuation is for TikTok's parent company ByteDance which has a large number of products and investments including a really popular news aggregation app in China.

Also, TikTok in China, which is its largest market, is popular with everyone, young and old. It got to the point of threatening WeChat. CEOs of Tencent and ByteDance had a huge spat a while back.

Re: TikTok has recently traded at valuations of $105-110B on private markets

#42

Post by kenhwang »

inimino wrote: post #19
sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

TikTok is fun. If you're not on it, it's hard to understand.

Snapchat is fun. If you're not on it, it's hard to understand.

Re: TikTok has recently traded at valuations of $105-110B on private markets

#43

Post by chosenbreed37 »

Barrin92 wrote: post #15
sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

> has a track record of jumping from platform to platform do they really though? It honestly seems like particular brands are very sticky with internet demographics, not just young people. IIRC there even is more brand loyalty among ecommerce than there is among physical brick and mortar stores. You can look at something like Whatsapp as well. There have been lots of privacy concerns after the acquisition by Facebook…

1.5 billion users already. That's staggering!

Re: TikTok has recently traded at valuations of $105-110B on private markets

#44

Post by bllguo »

mynegation wrote: post #35
knackfuss wrote: post #20

Earlier quoted context omitted.

This was my first reaction also but making a quick google search it seems that TikTok has 500 million users. That's a lot. Doing a pretty simple calculation of a dollar per user per day, you arrive quickly at 180 billion dollars of advertising monetization a year. It is really just another scale. But yeah, maybe i am way off and the valuation is still absurd.

Where did you get that “simple calculation” from? If Average user is worth to TikTok a dollar per day that means that ad buyers are willing to give it to TikTok from their advertising and marketing budget. Which means that the average user should spend at least few grands each year on advertised products and services, which does not seem likely. Also, this is not how valuations are estimated. 180 billion _per year_ i…

let's not quibble over semantics of "simple"

anyway the valuation clearly must include investor perception of their growth trajectory.

Re: TikTok has recently traded at valuations of $105-110B on private markets

#45

Post by pjc50 »

knackfuss wrote: post #20
sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

This was my first reaction also but making a quick google search it seems that TikTok has 500 million users. That's a lot. Doing a pretty simple calculation of a dollar per user per day, you arrive quickly at 180 billion dollars of advertising monetization a year. It is really just another scale. But yeah, maybe i am way off and the valuation is still absurd.

$1/user/day is a huge overestimate. Facebook manage a fraction of that.

Re: TikTok has recently traded at valuations of $105-110B on private markets

#46

Post by jariel »

enitihas wrote: post #23

What happens if Chinese big tech starts dominating the world? Since the US no longer dominates manufacturing, if the US starts losing in services too, what advantage will the US ever have on China?

This is an excellent question, but more pertinent is the fact that these companies are state-sponsored, state-backed.

The CCP/China views these apps as a serious tool of foreign policy and economic expansion, influence and control.

Imagine if Trump had meetings with Apple CEO and was subsidizing their product, creating worker legislation for them, directing/requiring banks to fund them, using the foreign service to help cut deals and suppress competitors etc., controlling/censoring everything in the AppStore.

This happens everywhere to some extent but it's very real for China.

It would be fine if some 'large, great Chinese companies' started doing some great things but that isn't really the case, this will be a form of economic dumping, state collusion and strategy.

It's a serious issue that 'old economy' Trump is nowhere close to understanding.

We don't want to get hyper-nationalist on the other hand, we can't afford to ignore the real systematic issues either, and only a very firm hand will be able to make a difference. This is in a way the paradox of Trump - he's the only US leader, arguably through bluster and arrogance - to be able to actually stand up to some systematic Chinese intransigence.

Re: TikTok has recently traded at valuations of $105-110B on private markets

#47

Post by FanaHOVA »

knackfuss wrote: post #20
sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

This was my first reaction also but making a quick google search it seems that TikTok has 500 million users. That's a lot. Doing a pretty simple calculation of a dollar per user per day, you arrive quickly at 180 billion dollars of advertising monetization a year. It is really just another scale. But yeah, maybe i am way off and the valuation is still absurd.

200M DAU so way above 500M users

Re: TikTok has recently traded at valuations of $105-110B on private markets

#48

Post by vikramkr »

knackfuss wrote: post #20
sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

This was my first reaction also but making a quick google search it seems that TikTok has 500 million users. That's a lot. Doing a pretty simple calculation of a dollar per user per day, you arrive quickly at 180 billion dollars of advertising monetization a year. It is really just another scale. But yeah, maybe i am way off and the valuation is still absurd.

One dollar per day!? That's an obscenely high level. Facebook is one of the highest revenue per user social media companies by orders if magnitude and they made worldwide an average of 7.26 per user in an entire financial quarter, which is like 8 or 9 cents per day. If tiktok is outdoing facebook by a full order of magnitude, and has 1/5th the users, even with identical growth expectations they'd be twice the valuation at like 1.2 trillion dollars. A couple billion in revenues plus investor belief in growth potential is more than enough to justify a 105 billion dollar valuation (nobody said investors can't overvalue companies either, look at wework). I dont think they're anywhere near as obscenely profitable as making a dollar per day across all international users, they're going to be orders of magnitude removed from that.

Re: TikTok has recently traded at valuations of $105-110B on private markets

#49

Post by mattlondon »

sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

Yeah I wonder about this too.

This time last year (or was it the year before that?) it was Snapchat (remember Snapchat? Kids don't) that was going to take over the world and be bigger than Apple + Facebook + Google combined etc etc. I don't think that worked out really.

I am guessing that investors just pile in wherever the "youth" are without paying too much attention to what it really is they are investing in... just hoping to get in early on the next big thing I suppose

Re: TikTok has recently traded at valuations of $105-110B on private markets

#50

Post by coralreef »

dclusin wrote: post #17
sjroot wrote: post #5

I really can't fathom how this is possible. The largely young demographic (which I'm guessing warrants this valuation) has a track record of jumping from platform to platform, whichever is trendy for a given year. With that in mind, how are investors seriously willing to get behind this company in such a big way?

Facebook was able to leverage their popularity with college students into a larger platform that had mass appeal with all age groups. I don't see why TikTok can't add features and get the same results.

Facebook solved the core problem of real identity on the web. Extending outside colleges was a natural progression (first to workplaces, then to high schools, then publicly).

TikTok solves the problem of short form video creation / entertainment. Will their userbase be interested in creating the same type of content in 4-5 years? I think they'll struggle the same way Snapchat struggles to convince people over 35 to use their app.

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