Fidelity may be down on the prospects of payments giant Stripe, but TikTok parent ByteDance has certainly caught the attention of the Boston-based asset management firm.
In recent filings for the firm's $123 billion Contrafund, Fidelity increased its valuation of ByteDance by 16% after just a single month. At the end of 2021, Fidelity said it valued its holdings in the Chinese company at $124 a share; by the end of January, those same shares are worth $148.66 apiece, according to fund documents.
Since Fidelity bought into the startup in November 2020, the value of the shares has increased by more than 26%, documents show. Fidelity's Contrafund stake is valued at $97 million, which makes up less than 1% of the manager's mutual fund, but provides details into how investors value private companies.
The filings also showed the fund marked down the value of its holdings in Stripe by 9%.
ByteDance's increase in valuation from Fidelity runs counter to what many of its publicly traded peers have done. Social media giants like Twitter and Facebook have shed 46% and 27% of their value over the last 12 months, respectively. Chinese internet giants like Alibaba and Tencent have also shed billions from their market caps.
China cracked down on its biggest companies last year, and ByteDance's value in the secondary market fell by roughly a fifth, according to a report from The Information at the time. However, positive news about the startup's growth and its surging popularity with young people across the globe has boosted its value.
ByteDance recorded a 70% increase in revenue in 2021, which trailed its 2020 figure but was still a massive win for a China-based company, according to a Reuters report. The company made roughly $58 billion last year, sources told Reuters.
The rapid revenue increase might be why Meta CEO Mark Zuckerberg recently told employees to focus on video after the Facebook and Instagram parent posted middling growth and revenue figures. He called the competition from TikTok "unprecedented" while imploring them to focus on products like Instagram's Reels.
Fidelity and ByteDance did not immediately respond to requests for comment.
