One of the most anticipated stocks of the year is Discord, a chat app that has become extremely popular over the last several years. Many investors, however, are unclear on whether Discord is already publicly traded and what the company’s future plans are.
As of the time of this writing, Discord is not publicly traded and hasn’t formally filed for an IPO. With that said, all indications suggest that the company will move toward a public offering in the relatively near future. Here’s what you need to know about Discord and its prospects for an IPO in 2022.
What Is Discord?
Discord is a voice, video and text chat app. It is primarily geared toward the needs of gamers, allowing them to communicate while playing in order to coordinate or discuss strategies. However, it also has a large user base outside the gaming community.
The company’s text chats are widely used by people with niche hobbies to discuss their shared interests.
What Company Owns Discord?
Discord is its own company (Discord, Inc) and is not currently owned by any other entity. Discord was founded by CEO Jason Citron and first launched in 2015.
Although Microsoft at one point expressed an interest in acquiring Discord, that acquisition was never finalized.
How Profitable Is Discord?
Because it is not publicly traded, Discord doesn’t release detailed financial statements that can be used to determine its profits and losses.
What is known, however, is some information regarding the company’s overall revenue. In 2020, Discord brought in $130 million. This represented a 188 percent increase over the previous year’s revenue.
This steep increase in revenue was mostly a result of users’ search for online communication platforms during lockdowns.
Is Discord Going to Go Public?
While formal plans for an IPO haven’t been announced, it’s speculated that Discord will go public sometime in 2022.
After Microsoft failed to complete its acquisition of the company, analysts began looking at Discord as a likely tech IPO.
The exact timing of Discord’s potential public offering remains unclear. Due to the amount of investor interest and the company’s fundraising, though, the general consensus is that the IPO will take place sometime in the first half of this year.
With that said, it’s important to remember that talk of a Discord IPO is still speculative. The company’s rapid fundraising strongly indicates that it could pursue a public offering in the near future. However, there are no guarantees that Discord stock will hit the market until it formally files for a public offering.
Does Discord Have a Stock Symbol?
At the moment, Discord does not trade publicly on any stock exchange. As a result, it has not been assigned a ticker symbol.
Given the probability of an IPO later this year, though, it’s very likely that the company will have a stock symbol soon.
How Do I Buy Pre-IPO Stock
For companies like Discord that are already very large and are likely nearing an IPO, it’s extremely difficult for retail investors to buy pre-IPO shares. What you can do, though, is buy stock as soon as the IPO occurs.
The first step in buying an IPO is usually meeting a set of requirements with your broker. Most brokerages have some kind of eligibility standards for investing in IPOs. Usually, these standards are based on the size of your current portfolio. Once you have met your broker’s eligibility requirements, you can put in a request to buy a certain number of shares.
As the IPO approaches, you’ll have an opportunity to place a formal order. Depending on your broker and the number of shares you requested, you may or may not be able to buy as many shares as you’d like. The broker will inform you of how many shares you’re authorized to buy and give you a deadline for placing the order. From there, all you need to do is finalize the order and wait for the IPO date, at which point you’ll receive your shares.
To successfully buy stock in an IPO, you’ll need to fully understand your broker’s rules and processes. Check with your brokerage to see what qualifications you need to meet and what you need to do. If you aren’t eligible to buy IPO shares with your current broker, you can also look for a brokerage with less stringent requirements.
Can I Buy Shares in Discord pre-IPO?
Until Discord formally announces an IPO, there isn’t a way for retail investors to buy shares in the company. Once an IPO is announced, though, you should be able to follow the process outlined above to purchase shares as soon as they are made public.
What Is Discord’s Valuation?
Discord’s most recent valuation comes from a funding round that occurred in September 2021. During that round, the company raised $500 million and reached a valuation of $15 billion.
This was nearly double the $7.3 billion Discord was valued at in its previous December 2020 funding round.
Is Discord Stock Publicly Traded: The Bottom Line
As of now, Discord stock is not publicly traded and is not available to retail investors. However, analysts believe that the company will likely pursue an IPO sometime later this year. Assuming this is the case, investors interested in Discord shouldn’t have too much longer to wait.
This leaves investors with the question of whether Discord will be a buy or sell, assuming the IPO does come later this year. The limited metrics currently available to the public point to strong overall performance and growth. The company is also tied to the video gaming industry, which has grown explosively in recent years.
The sheer number of users is also a major plus for Discord. As of 2020, the platform boasted over 150 million users and saw nearly 1 billion messages sent every single day. A platform this widely used clearly has enormous potential and could be a good investment.
On the downside, Discord has a somewhat limited revenue model. The company sells subscriptions that add premium features to the free version of the app. It doesn’t, however, sell any kind of advertising on its platform. This is actually part of Discord’s appeal, as many users prefer not to be monitored and tracked for advertising purposes.
The lack of ads puts it at a disadvantage when it comes to generating revenue from its massive user base, though arguably this is another revenue growth lever the company could turn on when public to further boost top line sales.
Whether Discord is a buy or sell will, of course, depend heavily on the financial reports that are filed at the time of the company’s IPO and the stock’s initial price. On the surface, Discord appears to be at least a promising tech company to own. With enormous growth and a strong user base that engages regularly, Discord has all the makings of a high-value tech company.
While it does have some drawbacks when it comes to revenue, the company is more than innovative enough to find solutions. So, although you may not be able to buy Discord stock right now, it’s worth keeping an eye open for the company’s probable IPO.
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