Prof G Markets: ByteDance’s Black Box, Target’s Inventory Turnaround, and the Resale Watch Market

Investment Potential

Scott Galloway highlights ByteDance's impressive growth, positioning it as a strong investment opportunity despite regulatory risks. He compares ByteDance's revenue multiples with tech giants like Alphabet and Meta, noting ByteDance's rapid growth rate of 40%, outpacing its competitors 1. This growth is reflected in the average daily time spent on TikTok, which surpasses YouTube and Netflix, making ByteDance a dominant player in the digital space 1.

I think they're more of a juggernaut than people think. I think it's the only Internet company in the world right now that is sandbagging its numbers such that it doesn't raise the alarm bells.

--- Scott Galloway

Galloway suggests that ByteDance's undervaluation stems from regulatory concerns, yet he believes these risks are already priced in, making it a potentially lucrative investment 2.

   

Transparency Issues

Concerns about ByteDance's financial transparency are significant, given its status as a major social media player. Galloway questions the authenticity of ByteDance's reported revenue figures, suggesting they might be manipulated to avoid regulatory scrutiny 3. The lack of transparency is troubling, as it prevents a clear understanding of how ByteDance generates its revenue, unlike publicly traded companies like Meta 3.

ByteDance is this total black box. So I guess my question to you would be, do you think the US, before we flat out ban the app, as people have been talking about, do you think we should be putting more pressure on China and on ByteDance to start releasing some semblance of regular financial disclosures?

--- Ed Yardeni

Galloway argues that until ByteDance offers transparent financial disclosures, trusting its reported figures remains challenging 2.