ByteDance stock option offering price lowered amid slowing growth -sources

TikTok owner ByteDance is launching a new stock option granting programme for its employees that according to two sources lowers its prices by 20% from the 2021 plan, as the Chinese company tries to retain talent amid slowing revenue growth.

The decision, which a ByteDance executive said was also aimed at attracting new talent, comes as the unlisted company was valued at around $300 billion recently, equalling roughly $170 per share, in the private equity secondary market.

That compared with the $300 billion-$400 billion valuations it received in the secondaries last year, according to one of the sources, who declined to be named because they are not authorised to talk to the media.

ByteDance’s stock option programme, called Restricted Stock Unit (RSU), will be offered at $155 per share this year and employees who were given shares at a higher price will be entitled to one-off RSU awards based on the new price, according to an internal memo seen by Reuters.

The company offered RSUs at $195 per share in early 2021 and $180 before that.

ByteDance, which runs share buyback programs twice a year to motivate employees, also offered to buy shares from employees at $142 per share earlier this year, according to one of the sources, adding that the company has no plans to lower the buyback price.

Those incentive plans come as a timeline for its much-anticipated initial public offering remains uncertain and its revenue growth slowed amid economic slowdown and Beijing’s regulatory crackdown on tech sector.

Its annual revenue growth dropped to 70% year-on-year in 2021 from more than 100% growth a year earlier, Reuters has reported.

Authors: Yingzhi Yang, Tony Munroe, Reuters

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