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Can You Invest in TikTok Stock?

Hey there, I’m Ross Cameron, and today I want to talk about TikTok. If you have ever thought about investing in TikTok stock, unfortunately, it’s just not possible. That’s because TikTok isn’t a publicly traded company, so you can’t simply hop onto a stock market and day trade or invest in the stock. But why is that? In today’s blog, we’ll talk more about why it’s not possible to invest in TikTok stock, as well as some alternatives you can consider if you want to benefit from the popularity of TikTok. Let’s dive in!

The TikTok Stock Ownership Conundrum 

TikTok, that viral short-form video app we all love, is owned by ByteDance, a private entity based in China. Because ByteDance isn’t publicly traded, its shares aren’t available for purchase on any stock exchanges. That’s why the door to direct investment in TikTok stock isn’t wide open for the average investor. If ByteDance was a publicly traded company, it would be possible to buy shares on the open market and gain direct exposure to TikTok. 

So, why is ByteDance keeping its doors closed? There are a few reasons. Firstly, being a private company allows them greater flexibility and autonomy in making decisions, free from the scrutiny and pressure of public shareholders. They can experiment, innovate, and even take risks without worrying about short-term market fluctuations. Secondly, it’s a strategic move to maintain control over their valuable data and intellectual property. Keeping TikTok closely guarded gives them greater leverage in negotiations and partnerships, allowing them to dictate their own terms.

Indirect Exposure to TikTok Stock

While it is not possible to invest in TikTok stock directly, indirect exposure to TikTok stock can be achieved through other investment avenues. Two giants, KKR and SoftBank, played pivotal roles in fueling TikTok’s meteoric ascent. These investment entities hold substantial stakes in ByteDance, creating a correlation between their performance and the performance of TikTok. Aligning investments with these backers could provide a tether to TikTok’s potential success, albeit indirectly.

KKR, the global investment firm known for its bold bets, first invested in ByteDance, TikTok’s parent company, in 2018. This early injection of capital provided ByteDance with the resources to scale its operations and refine its algorithms, laying the foundation for TikTok’s explosive global expansion. 

SoftBank, the Japanese tech visionary, entered the scene in 2019, leading a massive investment round that valued ByteDance at a staggering $75 billion. This influx of cash allowed ByteDance to further refine its AI technology, personalize user experiences, and acquire key assets like Musical.ly, a popular music-sharing app that merged with TikTok to create the juggernaut we know today. 

KKR and SoftBank’s motivations went beyond mere financial gain. They saw in TikTok a disruptive force in the social media landscape, a platform with the potential to redefine how people consume and create content. Their investments weren’t just monetary; they provided strategic guidance and access to their vast networks, opening doors for ByteDance in new markets and solidifying its position as a global player. 

Before considering any investment opportunity, a comprehensive research dive is crucial. Understanding the risk tolerance associated with each investment avenue and comprehensively diversifying one’s portfolio become pivotal considerations. Striking a balance between risk and potential gains is imperative for a well-rounded and balanced investment approach. 

Alternatives to TikTok Stock

Beyond investing in TikTok stock or it’s major backers, there’s a whole spectrum of alternative investment options that capture a similar essence of TikTok. Consider the notable players in the US social media scene, such as Meta Platforms (the brains behind Facebook, Instagram, and WhatsApp) and Snap Inc. (the innovative force behind Snapchat). Although they aren’t TikTok per se, these companies operate within a similar digital orbit and could potentially ride the waves generated by TikTok’s trends and innovations.

Meta Platforms, currently navigating a rebranding phase and venturing into the enigmatic metaverse, stands out. Despite being distinct from TikTok, there exists a strategic possibility for Meta Platforms to assimilate and integrate TikTok-inspired trends into its social media ecosystem. The blending of elements reminiscent of TikTok’s viral content and interactive features across Meta’s platforms might significantly amplify user engagement and redefine the landscape of social media.

Meanwhile, Snap Inc., recognized for its inventive approach, could be eyeing TikTok’s success as a source of inspiration. By pivoting its features and content to align more closely with the popularity in short-form video content, Snapchat might position itself as a haven for dynamic and engaging user-generated content, leveraging TikTok’s influence on user preferences and content consumption patterns.

Yet, the spectrum of indirect investment opportunities extends beyond these social media giants. Delve deeper into companies that form the backbone of the technology driving these platforms—leaders like Apple, NVIDIA and AMD. Their advancements in hardware crucially facilitate user engagement with TikTok and similar applications. Investing in such technological pillars can help to leverage the technological advancements driving the social media evolution.

Final Thoughts

TikTok’s not on the stock market because Bytedance, it’s parent company, is not a publicly traded company. Fortunately, there are still other ways to benefit from the popularity of TikTok. 

You can’t buy TikTok stock directly, but big companies like KKR and SoftBank have investments in ByteDance. As a result, these companies benefit from the success of ByteDance and TikTok which can make them an alternative way to benefit from the popularity of TikTok, even though you can’t buy TikTok stock directly. 

There are also different stocks that can be considered instead, like big social media names—Meta Platforms and Snap Inc. They’re not TikTok, but they might catch some of TikTok’s buzz. Also, players like Apple, NVIDIA and AMD provide the hardware that make platforms like TikTok possible. 

While, TikTok’s stock might be off-limits, there are alternative options that follow the social media trend. Remember, do your research and perform due diligence before considering any investment opportunities. 

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