ByteDance has agreed to a $92 million class-action settlement to settle data privacy claims from some U.S. TikTok users, according to documents filed Thursday in U.S. District Court in Illinois.
ByteDance, the Chinese company that owns the short video app TikTok that has more than 100 million U.S. users, agreed to the settlement after more than a year of litigation.
“While we disagree with the assertions, rather than go through lengthy litigation, we’d like to focus our efforts on building a safe and joyful experience for the TikTok community,” TikTok said Thursday. The settlement still requires court approval.
Kuaishou Technology surged three-fold in its Hong Kong stock market debut on Friday to become the fifth-largest listed company in the city, driven by massive demand from mom-and-pop investors for the Chinese online video service operator.
The first-day pop, while among the largest, is one of many strong recent debuts in the Asian financial hub – an encouraging sign for others looking to tap into the market while also adding to global concerns about an asset bubble and risks retail investors are taking.
Kuaishou shares opened at HK$338 ($43.60) and rose to as much as HK$345, versus HK$115 apiece in the $5.4 billion initial public offering (IPO). At the day’s high, Kuaishou’s valuation stood at just over $180 billion.
The float is the biggest in Hong Kong since Budweiser’s Asia unit raised $5.75 billion in 2019. Retail investors bid for 1,204 times the amount of Kuaishou shares on offer for them in the IPO, mostly backed by borrowed money.
The Friday spike in Kuaishou shares was driven by demand from customers from mainland China, who cannot invest in IPOs in Hong Kong but can buy in the secondary market if they have brokerage accounts in the city, said Louis Tse, managing director of brokerage Wealthy Securities.
Retail investors in Hong Kong who failed to get shares in the IPO also piled in, Tse said, adding there was a lot of pent-up demand after the last-minute suspension of Ant Group’s blockbuster $37 billion dual-listing in November.
“This bodes well for other Hong Kong IPOs, if the companies are well known on the mainland,” Tse said.
TikTok-owner Bytedance has been considering listing its onshore Chinese short video app Douyin in Hong Kong, Reuters reported last year.
Douyin and Kuaishou are rivals.
Kuaishou was the world’s No.2 short video platform in the first nine months last year, its IPO prospectus said.
It had an average of 275.9 million daily active users over the period, the prospectus adds, citing iResearch, as the pandemic forced people to spend more time online.
While access to Kuaishou is free, the company makes money through selling virtual items which users gift to the creators of the videos, online marketing and commissions from e-commerce sales on the platform.
The company plans to use the proceeds of the IPO to grow its ecosystem, strengthen research and for selective acquisitions, it said in an exchange filing.
Kuaishou’s sharp spike on debut, however, comes against the backdrop of growing fears about an asset bubble, with amateur investors boosting the price of assets ranging from cryptocurrencies to new market listings.
“I’m not very familiar with the app to be honest. But I’ve heard good things about the company, and I know it is backed by Tencent,” 67-year-old taxi driver Mars Lau, who bid for shares in the Kuaishou IPO, told Reuters ahead of the listing.
Among other recent floats where shares surged on debut are Smoore International that gained 150% in July last year after it raised $1.1 billion at its IPO.
JD Health International Inc gained 56% when it debuted in December after raising about $3.48 billion, and toy maker Pop Mart International Group closed nearly 80% higher on its first day.
The recent sharp rise and fall in U.S. videogame retailer GameStop and some other stocks have put investors on edge and prompted some brokerages globally to raise margin requirements or stop offering leverage for buying securities.
“Kuaishou is definitely a bubble if you look at its forward P/E,” said Dickie Wong, executive director of research at Kingston Securities, referring to the price to earnings ratio.
“However, I don’t think it will burst like GameStop, there is so much demand,” Wong, who owns Kuaishou shares said, citing interest from mainland China and the likelihood of the company being included in Hong Kong indices.
India’s ministry of electronics and information technology has issued fresh notices to make permanent a ban imposed on video app TikTok and 58 other Chinese apps in June, Indian media reported late on Monday.
When it first imposed the ban, the Indian government gave the 59 apps a chance to explain their position on compliance with privacy and security requirements, the Times of India bit.ly/3iJxgcX reported on Monday.
The companies, which include ByteDance’s popular video-sharing app TikTok, Tencent Holdings’ WeChat and Alibaba’s UC Browser, were also asked to respond to a list of questions, the newspaper said.
“The government is not satisfied with the response/explanation given by these companies. Hence, the ban for these 59 apps is permanent now,” business newspaper Livemint bit.ly/3a3Us1t quoted a source familiar with the notices as saying. It said the notices were issued last week.
The ministry’s June order stated that the apps were “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order”.
The order, which India referred to as a “digital strike”, followed a skirmish with Chinese troops at a disputed Himalayan border site when 20 Indian soldiers were killed.
In September, India banned another 118 mobile apps, including Tencent’s popular videogame PUBG, as it stepped up the pressure on Chinese technology companies following the standoff at the border.
A TikTok representative told the Economic Times bit.ly/39lKf1v newspaper that the company was evaluating the notice and will respond to it as appropriate.
The ministry of electronics and information technology could not be reached for comment outside regular working hours. TikTok did not respond to a request for comment.
The US president has accused the Chinese tech firm of passing on information regarding American users to Beijing. Earlier this month, a court ruled in favor of TikTok but Trump is not giving up the case just yet.
The Trump administration on Monday appealed a federal court ruling which allows Chinese-owned short video-sharing app TikTok to continue to operate in the United States.
Trump has previously accused the tech firm of potentially leaking information about American users to the Chinese government but that notion was dismissed on December 7 by US District Judge Carl Nichols, as well as in a parallel case submitted in Pennsylvania.
The allegations of espionage from Trump have also been refuted by TikTok, which has over 100 million users in the US.
But now the Justice Department has revealed it is taking the case to the US Court of Appeals for the District of Columbia, even though the new legal challenge does not include fresh arguments for introducing a ban.
Commerce Department ‘acted in a capricious manner’
Previously, Trump said the ban was needed in order to “protect our national security.”
However, Judge Nichols said TikTok’s attorneys had ably demonstrated that the Commerce Department probably overstepped its authority by seeking to prohibit the social media app and “acted in an arbitrary and capricious manner by failing to consider obvious alternatives.”
TikTok has maintained its innocence over data transfers to Beijing, saying it keeps user information on servers in both the United States and Singapore.
TikTok has an additional fight on its hands in the form of an August 14 executive order from Trump to force ByteDance, which owns the video-sharing app, to sell its US operations to an American buyer.