Buy TikTok Shares (ByteDance): Is it possible?
Published: 11 October 2020 by Valentina
There is a new social network that is overwhelmingly becoming one of the most downloaded apps by young people (and not only) and it is produced by the Chinese company ByteDance. Buying TikTok shares can become a great investment opportunity in the near future, but there are some things to consider.
OnlineTradingCourse is the leading site in evaluating upcoming IPOs. In order to assess if buying TikTok shares is a good investment or not, we have to make an analysis of the company and the prospects of the stock on the market.
Here are the steps required to buy TikTok shares:
- Choose the Broker
- Start with the Demo account without risks
- When you have enough experience, you can move on to investing for real
The first point concerns the choice of the Broker which is fundamental. To buy TikTok shares (Byte Dance), you need a CFD Broker such as eToro or one of the alternatives below, which allow you to trade safely and without paying commissions:
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
What is TikTok?
TikTok is a Chinese app known in the country of origin with the name of Douyin. It is a video sharing social network owned by ByteDance, a Beijing-based company founded in 2012 by Zhang Yiming.
This social network allows users to watch, create, and share 15/60 second videos shot with their smartphone. Its peculiarity is the very high degree of involvement and addiction it creates among young people and beyond.
Douyin, the Chinese app that started TikTok, was launched in 2016 by the startup ByteDance, which two years later incorporated another similar app called Musically, starting its international expansion.
Crunchbase reported that ByteDance was valued at $ 75 billion in 2018, making it the most valuable startup in the world.
It owns several other apps and has raised $ 3 billion from investors, including SoftBank Group, KKR, K3 Ventures, TCV, and General Atlantic.
The listing could be imminent but there is still no certain date, especially due to all the “political” problems concerning TikTok, which are limiting its use in some countries, including the United States of America and India.
The IPO of ByteDance (the parent company of TikTok) could arrive between 2020 and 2021 and there are many investors who are preparing for this listing, which promises to be one of the profitable investments of the near future.
TikTok: Business Model
The App is becoming very popular and the business model is based on global expansion, in order to convert this popularity into profitability.
TikTok has offices in Beijing, Berlin, Jakarta, London, Los Angeles, Moscow, Mumbai, Sao Paulo, Seoul, Shanghai, Singapore, and Tokyo.
Like other social medias, TikTok earns with purchases made within the App and with sponsorships, even if the system is still in an embryonic stage and there is no precise data on turnover or any profit generated by the app.
The company grossed $ 80 million from in-app purchases globally in 2018 and in 2019. This figure grew by more than 200%, but there is still no news of the real profits.
How to buy TikTok shares
Buying TikTok shares means investing in the parent company ByteDance, which is not listed yet. Therefore, what you can do, is to prepare for the IPO (initial public offering), which is likely to happen in the coming months.
To invest in a simple and safe way in shares, it is advisable to use CFD Brokers who are regulated and reliable intermediaries.
CFDs (contracts for difference) are contracts that allow you to trade any security and offer two great advantages:
- The possibility to invest both up and down (short selling)
- Investing without commissions
Here’s how you trade a stock on a CFD Broker’s platform:
- To buy TikTok (ByteDance) shares, you need to buy the corresponding CFD and you will earn if the share prices go up.
- To invest on falling TikTok (ByteDance) share prices, you need to sell the corresponding CFD and you will earn if the prices go down.
Once the desired profit has been reached (up or down), just close the transaction and any profit will be net, without adding commissions.
To prepare for the listing of ByteDance (TikTok), you must choose the platform that you will use to invest. Let’s see how to do it in the next paragraph.
Buy TikTok shares with the best platforms
Let’s start by saying that the platforms are the softwares that online brokers offer to invest. In order to choose the best ones, the CFD brokers must have some essential requirements:
- They must be regulated and authorized by third control bodies such as FCA or CySEC.
- They must offer services, assistance, and possibly also training and trading support.
From our evaluations, it emerged that the best platforms where to buy TikTok (ByteDance) shares are made available by these CFD brokers: eToro, ForexTB and IQ Option.
eToro: Intuitive platform to buy TikTok shares
eToro is the most popular online trading broker in the world and its audience of over 7 million active users confirms its reliability. This CFD Broker operates in the UK under the supervision and license of FCA.
The eToro trading platform is very intuitive: From the first use, it is possible to understand very easily its characteristics and the many tools it offers.
To buy TikTok shares (or sell them), after the ByteDance IPO, click on “Invest”, decide whether to Buy or Sell the stock, and decide how much to invest in the single operation.
If you are one of those traders, who love automatic investments, you will be happy to know that eToro offers one of the most revolutionary automatic trading tools in the world: Copy Trading.
This original patent allows you to copy the operations performed by the best traders in the world (on eToro) automatically and for free.
Copy Trading works like this:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Here are some of the best eToro Traders:
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB: Trading signals to buy TikTok shares
ForexTB has chosen an innovative way to get noticed among investors by focusing essentially on training, operational support, and making trading more profitable right away.
This broker is safe and regulated at European level by CySEC, which supervises its work as a financial intermediary.
First, ForexTB has created a free trading course, which is considered the best basic course on the market. In the ebook, we find a detailed description of online trading, which also allows newbies to quickly learn all the basic notions of technical analysis.
Once you have learned the theoretical basics, you need practical support. ForexTB offers this by sending its free Trading Signals to all investors. These operational indications are very reliable because they come from the Trading Central and have a success rate of over 70%.
Users have different needs and preferences and for this reason ForexTB offers two free trading platforms:
- The web platform is easy to use and can be entered from any browser without downloading any software.
- Metatrader 4 is more technical and full of professional indicators and meets the needs of the more experienced traders.
Investing in TikTok shares after the IPO will be therefore very easy: Just select the stock, click on Sell or Buy, and decide how much to invest in the operation.
IQ Option: Buy TikTok shares with 10 Euros
IQ Option has intercepted one of the main needs of novice traders: The need to invest even with low capital available.
This intermediary is authorized by FCA and other supervisory bodies, which allow it to offer its services in numerous countries.
The feature that has made it very popular among traders is the minimum deposit required to open a real account: 10 Euros.
Such a low minimum deposit allows you to trade for real even with a few Euros available, practicing and gaining experience.
Buying TikTok shares (following the listing of ByteDance on the stock exchange) will be therefore really cheap with this online broker. You can invest a few Euros, but experience the thrill of trading on real markets, which is a very different feeling from investing in the Demo account.
The IQ Option platform is advanced, fast, and meets the needs of the most experienced traders.
To support traders, especially novice ones, IQ Option has created an educational area where you can access a whole series of free courses that aim to deepen every detail of online trading.
Is it possible to buy TikTok shares?
TikTok faces some obstacles that have nothing to do with the listing, but are mainly political issues.
- On February 27th, 2019, the United States Federal Trade Commission (FTC) fined ByteDance $ 5.7 million for collecting information from children under 13, in violation of US law.
- On June 29th, 2020, the Indian government banned TikTok, along with 58 other Chinese apps, for problems related to an alleged “incitement to pornography”, but it is likely that the real problem concerns the difficult relations between India and China.
- Moreover, on August 6th, 2020, Trump signed an executive order banning “links” between TikTok and its parent company ByteDance in China, out of fear of Chinese spying on US citizens.
CIA analysts have determined that while it is possible that the Chinese government could obtain information on TikTok users anywhere in the world, there is no evidence of that.
Buy TikTok Shares: Advantages
The problems we have seen are mainly of political nature, but have also shaken the company from a commercial point of view, causing the interest of some US giants, which could buy TikTok and install servers on American soil, to rise.
Walmart has confirmed that it has joined forces with Microsoft in negotiations to purchase TikTok. Oracle is also rumored to be interested in the Chinese app, but we don’t know how is the situation.
The interest of these large American companies does nothing but increase the perceived value of TikTok and of the company that owns the brand: ByteDance.
At the moment, there is no tangible evidence of TikTok’s profits, but it seems that ByteDance is positive since 2019. If this news is confirmed, the share price after the IPO would rise very quickly.
The main competitors of TikTok are the major world social networks, which certainly will not stand by while ByteDance tries to acquire important slices of the market. The most important are:
TikTok stock forecast
Talking about a TikTok IPO is realistic, but assessing the timing is more complicated.
ByteDance wants to go public, but to be listed on the stock exchange with the sword of damocles of the executive decrees that limit its use in the US, would preclude the interest of US investors, who are essential to obtain a listing that reflects its market value.
The forecasts for TikTok shares are positive, the app is constantly growing, but before the IPO, the political problems concerning ByteDance must be solved, otherwise the listing could fail.
The guide we have written is to prepare for the listing of ByteDance on the stock exchange. We have analyzed the TikTok app and its business model and if we exclude the political problems that revolve around the US-China trade conflicts, buying TikTok shares will probably be a great medium / long term investment.
The first action is the choice of the broker where to invest, then you start by practicing on the Demo account and when you have sufficient knowledge of the platform, you can invest the minimum deposit required and start trading on real markets.
Here are the official links to access the Demo accounts of the best trading platforms:
- Access the eToro Demo account for free by clicking here
- Register on ForexTB and try the Demo account by clicking here
- Access the IQ Option Demo account for free with this link
Before buying TikTok shares, you have to wait for ByteDance, the parent company, to go public.
TikTok is currently not listed on the stock exchange.
CFD brokers offer the best platforms to buy TikTok shares without paying commissions.
The outlook for TikTok shares is positive but there are some uncertainties to consider. To learn more, read our guide.