ByteDance investors value TikTok at $50B in takeover bid • Hacker News Board

Re: ByteDance investors value TikTok at $50B in takeover bid

#61

Post by FooBarWidget » Wed, Jul 29, 2020, 2:43 PM UTC

_vbdg wrote: post #30

FooBarWidget wrote: post #13

Earlier quoted context omitted.

I really doubt Tiktok's founder has that sort of leverage/power over the Chinese government. The current Chinese regime makes rational decisions, I doubt they'll think banning Tesla and Apple in order to protect Tiktok is worth it from a cost/value ratio point of view. Huawei is way more valuable to the Chinese government, and they didn't ban US companies in retaliation either.

> they didn't ban US companies in retaliation either That's probably because they've already been banning American companies for years if they posed any potential thread to Communist control.

You mean, as opposed to other countries, where entities that threaten to overthrow their governments are allowed to continue to operate?

Re: ByteDance investors value TikTok at $50B in takeover bid

#62

Post by coralreef » Wed, Jul 29, 2020, 2:45 PM UTC

jbob2000 wrote: post #58

josephpmay wrote: post #19

Earlier quoted context omitted.

Snapchat is doing great and making money. They're still worth over 33 Billion.

They're making money until they aren't. OnlyFans is sweeping a large amount of adult models off of Snapchat. Everyone is doing disappearing content, stories, and photo filters. The only thing they have left are the contracts they signed with companies and creators when they were in their heyday.

They make money from advertising to end users. They have consecutive quarterly growth and are at an all time high for DAU:

https://www.statista.com/statistics/545967/snapchat-app-dau/

Re: ByteDance investors value TikTok at $50B in takeover bid

#63

Post by chirau » Wed, Jul 29, 2020, 2:46 PM UTC

Contrary to what I am realizing is a common misconception in this thread that $SNAP is struggling, it is actually doing very well.

Re: ByteDance investors value TikTok at $50B in takeover bid

#64

Post by paulpauper » Wed, Jul 29, 2020, 2:47 PM UTC

reaperducer wrote: post #60

paulpauper wrote: post #53

Earlier quoted context omitted.

At this point, give how wrong over the past decade pundits have been about Tesla, Uber, Facebook, Shopify, Amazon (and many others), I am inclined to discount/ignore any prediction of a rapidly-growing consumer tech or app company being a bubble. These pundits have a horrible track record of predicting this sort of stuff. A common thread for why these forecasts tend to be so bad is, such pundits ignore the growth of…

All of that is only true if you only look at the successes, such as those you’ve illustrated. For every pundit-bashed unicorn, there are tens of thousands of times the pundits got it right.

look at all the articles since 2010 or so about Amazon and Tesla being bubbles. Or before that, articles in 2007-2010 about Facebook being Myspace. Or about Uber dying due to debt (this was in 2014-2016). These are the companies pundits write the most about ,and have been wrong. Yeah, many unicorns do fail or get acquired for sub-billion, but pundits seldom if ever write about them, except when they fail. The media wrote way more articles about Uber being a bubble than Fab, even though Fab died and Uber is doing well and worth >$40 billion .

Re: ByteDance investors value TikTok at $50B in takeover bid

#65

Post by lightroast123 » Wed, Jul 29, 2020, 2:48 PM UTC

Firebrand wrote: post #51

alehul wrote: post #14

Many are suggesting that TikTok would be overvalued at $50B. If that's the case, do you believe FB is overvalued at $662B? Instagram, as of 2018, was estimated to be worth around $100B on its own (with about 1b MAUs, versus TikTok's 800m). TikTok seems at least equally addictive, and its algorithm does a fantastic job at quickly showing good content that matches your interests.

It’s been reported Facebook has been offering exclusivity contracts to some of TikTok’s most followed personalities for its new competitor, Reels. It reminds me of Microsoft’s streaming platform giving millions to Ninja and Shroud only to close it down months later. TikTok has been very good at focusing on new content discovery first when you open the app, making you swipe left to see the people you follow second—thi…

I feel that new personalities would just take their places given TikTok's would just push different videos should some leave. Since the magic of TikTok is the "for you" page, if reels does not replicate well then it may not take away a significant share. While instagram stories hampered growth from snap, they've also seemed to have some failures ex. competing against twitch. There were some tournaments hosted on the fb gaming platform but it seems like many of them have returned to twitch.

Re: ByteDance investors value TikTok at $50B in takeover bid

#66

Post by adventured » Wed, Jul 29, 2020, 2:51 PM UTC

josephpmay wrote: post #19

jbob2000 wrote: post #18

Earlier quoted context omitted.

Apps are easy to install... and easy to uninstall. Where's Snapchat these days? What about Vine? What about tumblr? These companies make apps to try to monetize a community, but communities are fickle and easy to scare off. If I were an investor, I'd value these apps for the computers in their offices and the code their developers write and that's it. Maybe $100mil if you get me on a good day. You can't value them fo…

Snapchat is doing great and making money. They're still worth over 33 Billion.

> Snapchat is doing great and making money.

Snap is losing a lot of money.

Their operating loss was an astounding $596 million for the first two quarters of 2020. Barely an improvement over last year's $620m operating loss for the same period.

Somehow they managed to generate a $596m operating loss on $916m in sales. Truly remarkable performance. It's not easy to so poorly run a business that should be printing profits. Facebook generated nearly a billion dollars in operating profit at that sales scale. The least Snap could do is break even.

Re: ByteDance investors value TikTok at $50B in takeover bid

#67

Post by rydre » Wed, Jul 29, 2020, 2:53 PM UTC

basseq wrote: post #52

alehul wrote: post #22

Earlier quoted context omitted.

Good question - TikTok generated $176.9m revenue in 2019, but it's still in its infancy in terms of generating revenue. Instagram, acquired for $1b in 2012, had $0 revenue. WhatsApp, acquired for $19b in 2014, had $10.2m revenue. Based on TikTok's usage-per-day and active users being comparable to Instagram, they could presumably generate ~similar revenue if focused on it. With these types of apps, growth comes first…

Also, from the article: "The investors’ bid values TikTok at 50 times its projected 2020 revenue of about $1 billion..." So that's a projected revenue growth of 465%. That's still projected , but a big number.

Projected revenue for 2021 is $6b. $50B valuation is robbery at day sight by investors. TikTok's China sibling Douyin is projected to make $28 billion this year in China.

Re: ByteDance investors value TikTok at $50B in takeover bid

#68

Post by tashoecraft » Wed, Jul 29, 2020, 2:54 PM UTC

paulpauper wrote: post #53

alehul wrote: post #14

Many are suggesting that TikTok would be overvalued at $50B. If that's the case, do you believe FB is overvalued at $662B? Instagram, as of 2018, was estimated to be worth around $100B on its own (with about 1b MAUs, versus TikTok's 800m). TikTok seems at least equally addictive, and its algorithm does a fantastic job at quickly showing good content that matches your interests.

At this point, give how wrong over the past decade pundits have been about Tesla, Uber, Facebook, Shopify, Amazon (and many others), I am inclined to discount/ignore any prediction of a rapidly-growing consumer tech or app company being a bubble. These pundits have a horrible track record of predicting this sort of stuff. A common thread for why these forecasts tend to be so bad is, such pundits ignore the growth of…

Fab at least grew so fast and did an absolutely terrible job at it. Invested in warehousing and competing with Amazon in terms of options and delivery. Money was treated as endless, each employee was given a membership to Equinox for example, ~200/month per employee, let alone all the other mindless expenses. Young employees were given free reign to buy whatever they thought would sell, which lead to massive stockpiles of crap they had to sell away. I bet Fab would have been successful if it was managed in any type of coherent way.

Re: ByteDance investors value TikTok at $50B in takeover bid

#69

Post by buran77 » Wed, Jul 29, 2020, 2:55 PM UTC

paulpauper wrote: post #64

reaperducer wrote: post #60

Earlier quoted context omitted.

All of that is only true if you only look at the successes, such as those you’ve illustrated. For every pundit-bashed unicorn, there are tens of thousands of times the pundits got it right.

look at all the articles since 2010 or so about Amazon and Tesla being bubbles. Or before that, articles in 2007-2010 about Facebook being Myspace. Or about Uber dying due to debt (this was in 2014-2016). These are the companies pundits write the most about ,and have been wrong. Yeah, many unicorns do fail or get acquired for sub-billion, but pundits seldom if ever write about them, except when they fail. The media w…

The obvious difference is that none of those examples had the US government as an adversary. In such cases it's hard to evaluate any product or service based on its merits but rather based on which side of the political games they fall on. It is in the US's general best interest for Uber or Tesla to succeed, no so for TikTok, quite the opposite actually.

Re: ByteDance investors value TikTok at $50B in takeover bid

#70

Post by hellomyguys » Wed, Jul 29, 2020, 2:57 PM UTC

mschuster91 wrote: post #47

hellomyguys wrote: post #34

50B would be a steal imo. Don't get me wrong, this is still the early days for TikTok, but as a platform, TikTok seems way more compelling and interesting than Instagram at this point. Especially for younger people who are tired of the social behavior that's formed on IG. Even though the user base is primarily younger folks, they're doing a good job of aging up too. Core product value is way easier to deliver than Sn…

> Especially for younger people who are tired of the social behavior that's formed on IG. Eternal September: what has happened to Instagram will also happen to TikTok. Additionally there is the very real risk that TikTok will be seen by governments as what it is: Chinese spyware. India has already banned it, I hope that the rest of the world follows suit.

>Additionally there is the very real risk that TikTok will be seen by governments as what it is: Chinese spyware. India has already banned it, I hope that the rest of the world follows suit.

Well that's why the investors are trying to take it over.

>Eternal September: what has happened to Instagram will also happen to TikTok.

Definitely agree this is always a concern, but the type of content that is rewarded on TikTok makes it less exploitable by people who build followings by posting low-effort content that looks good aesthetically.