Should your shares in a company be worth less if you no longer work there? ByteDance, the Chinese tech conglomerate that owns TikTok, thinks so. And some of its ex-employees are pissed.
As you may have read by now, ByteDance earlier this week notified its thousands of employees in the US that, for the first time, they can begin the process of selling their stock back to the company. Given that ByteDance has no near-term plans to go public or spin off TikTok as a standalone entity, this employee buyback is the only option most staffers have for cashing out their vested shares.
These buybacks are fairly common among late-stage, privately-held tech companies, and ByteDance has done them regularly outside of the US for years. But there’s a big wrinkle to how the buyback works in the US that many employees weren’t expecting when they received the details on Monday: if you no longer work for ByteDance, your stock is worth 20 percent less than if you’re a current employee. This has caught many US shareholders by surprise, with some questioning whether what ByteDance is doing is illegal. At least one former TikTok manager has already filed a complaint with the SEC.
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