TikTok owner ByteDance may reportedly scrap plans for a blockbuster global IPO and just list its Chinese business at home instead

• TikTok owner ByteDance is considering scrapping a global IPO in favor of a listing of just its Chinese business, Reuters reported Friday.
• The tech giant was initially planning a blockbuster IPO in New York or Hong Kong.
• Tensions between US and China are growing, and the US is exploring ending a 2013 auditing agreement with China, which would make it harder for Chinese companies to list in the US.
• ByteDance has been in talks with Hong Kong Exchanges and Clearing (HKEX), two people told Reuters.

TikTok's Chinese parent company ByteDance is reportedly shelving initial plans to list its whole business in a blockbuster IPO, and is now considering just listing its China business closer to home in Hong Kong or Shanghai, Reuters reported Friday.

The reported shelving of the global IPO, which was slated to take place in New York, comes as tensions between the US and China flare, and Washington considers banning TikTok on security grounds.

Reuters said, quoting two anonymous sources, that of the two locations, ByteDance would prefer to list in Hong Kong.

This marks a departure from the tech company's original plan, which was to list as one entity in New York or Hong Kong in what was expected to be one of the biggest IPOs in years.

ByteDance has been in talks with Hong Kong Exchanges and Clearing (HKEX) over listing its China business, two people told Reuters.

The standalone listing if realized, could pave the way for ByteDance to be priced worth $100 billion in Hong Kong or Shanghai's Nasdaq style STAR market.

ByteDance's change of heart comes amid growing tensions between US and China, putting a 2013 audit deal between both countries that enabled Chinese firms to list in the US, in jeopardy.

The tech company shot to fame through its app TikTok and the Chinese equivalent, Douyin. TikTok has exploded globally, and is particularly popular among teenagers.

Tensions flared up on the Himalayan border last month between India and China, and India retaliated by banning 59 Chinese apps, including TikTok.

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Speculation followed whether other countries such as the US could also ban the viral app on security grounds.

The plan to explore two listings began after the Committee on Foreign Investment in the US (CFIUS) began investigating TikTok's use of data last year.

TikTok is believed to be worth as much as $140 billion.

The idea to list closer to home comes as relations between US and China are the close to the worst they have ever been after China enacted security legislation in Hong Kong and the countries engaged in a blame war over who is responsible for the coronavirus outbreak.

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Tensions flared again last week as the US ordered the closure of the Chinese Consulate in Houston and China subsequently ordered the closure of the US Consulate in Chengdu.

ByteDance was not immediately available for comment when contacted by Business Insider.