BYTEDANCE is buying back shares from US employees in a deal that values the TikTok parent company at US$223.5 billion, about 26 per cent lower than the valuation it hit in a similar transaction a year earlier, The Information reported on Monday (Oct 2).

The company is looking to buy at least US$300 million worth of stock from current and former US employees, the report said, citing two sources with direct knowledge of the situation.

ByteDance did not immediately respond to a Reuters request for comment outside of normal business hours.

Several startups have had to take a cut to their valuations, as the pandemic-era exuberance of 2020 and 2021 in the private investment market due to accommodative monetary policy and easy capital that had led to unsustainable spikes waned.

The deal comes at a time when ByteDance-owned short video app TikTok has been facing growing calls for a nationwide ban from some US lawmakers over concerns about potential Chinese government influence over it. ByteDance has denied the allegations.

TikTok CEO Chew Shou Zi was grilled in a congressional hearing in March where US lawmakers expressed concerns about the impact of the content on the platform on children’s mental health, reflecting bipartisan concerns about the app’s power over Americans.

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Separately, the Wall Street Journal reported on Monday that ByteDance turned an operating profit of nearly US$6 billion in the first quarter of 2023, nearly doubling from a year earlier. REUTERS