ByteDance, the parent company of TikTok, put its IPO plans on hold following the Chinese government's crackdown on data security risks. Given that ByteDance holds a considerable amount of user data, they certainly could be a victim of the government's increased scrutiny.

Additionally, ByteDance wants to avoid DiDi's (DIDI  ) unpleasant experience of going public, only to see its shares drop by 25%, and generate suspicion among investors about how much the company knew about these investigations. This also follows chatter that Beijing may be looking to end the loophole which allows Chinese companies to list overseas.

ByteDance is one of the fastest-growing companies in the world and is by some measures, the second-largest social media platform in the world. Further, it appeals to a younger demographic, and its videos are tailor-made and better optimized for ads than other social media which is evident in TikTok's revenue growth. The company's value reached $180 billion in its last funding round.

During the Trump Administration, it seemed that the company would be forced to divest TikTok, yet this is no longer the case. Since then, the company was rumored to be preparing an IPO, however, these plans have been shelved following recent developments in China and ByteDance founder Zhang Yiming's meetings with cyberspace and securities regulators.

China has been harshly targeting many of the country's tech giants as it seeks to reassert its dominance. Some have speculated that the Chinese Communist Party was concerned following U.S. tech companies' successfully de-platforming former President Donald Trump following the events of January 6. Therefore, regulators have been aggressively targeting companies for monopolistic practices, data security, and concerns over overseas listings.

Chinese regulators are concerned about the data security compliance of ByteDance's apps in China. ByteDance has TikTok-like services in China which are also very popular such as Douyin and Jinri Toutiao. Some of the personal information collected includes phone numbers, birthdays, real names, and ID numbers. Of course, this follows concern in the U.S. about TikTok's security and data collection and worries that this data would be stored in servers that were accessible by the Chinese government.

However, ByteDance doesn't face any immediate pressure to go public as it is a cash-generating machine. Last year, the company more than doubled revenue to $34 billion which makes it one of the highest revenue-generating, tech companies in the world. The company's gross profit reached $19 billion.