Report: Losses Mount for TikTok’s Chinese Parent Company ByteDance

Chinese-owned social media giant TikTok’s parent company, Beijing-based ByteDance, saw its operating losses more than triple last year to above $7 billion. Meanwhile, the company spent heavily to continue its growth.

The look into ByteDance’s money matters is rare, as the Chinese company closely guards its finances, and doesn’t publicly disclose its results.

The report — sent to employees in August and obtained by the Wall Street Journal — covers the full years for 2020 and 2021, as well as the first quarter of 2022.

ByteDance’s financial report shows that while the company is quickly increasing its revenues and collecting large amounts of cash and other investments, its net results are nonetheless burdened by tens of billions of dollars in unrealized market losses on convertible securities.

An “unrealized loss” means that the market value of a security has dropped, despite the product having not been sold.

While ByteDance’s revenue continues to expand — up nearly 80 percent to $61.7 billion in 2021 — its expenses are, too, as it focuses on company growth.

Meanwhile, the company’s net loss reportedly widened by more than 87 percent to $84.9 billion in 2021, according to the report. Moreover, ByteDance’s operating losses in 2021 totaled $7.15 billion, up from $2.14 billion the year prior.

While ByteDance is known in the U.S. for its high-profile and controversial product TikTok, it also operates apps used by hundreds of millions of people in China, such as Douyin and Jinri Toutiao.

The financial report, however, does not break out the relative performance of each ByteDance entity, the Wall Street Journal notes.

Meanwhile, TikTok is reportedly close to striking a deal with the Biden administration to resolve national security concerns. Nonetheless, there are still hurdles to bypass.

Last month, former TikTok employees reportedly claimed that at least five senior leaders at the social media firm left in the last two years because they discovered they were unable to significantly influence decision-making as the company is still largely directed by ByteDance.

You can follow Alana Mastrangelo on Facebook and Twitter at @ARmastrangelo, and on Instagram.