Discord IPO: what you need to know and how to buy shares
Here’s everything you should know about the upcoming initial public offering (IPO) of US decacorn, Discord Inc.
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When is the Discord IPO expected to take place?
There is no word nor confirmation yet on when the gaming-dedicated chat function-turned-social media and messaging app will officially go public, but there have been rumblings of a possible share sale in 2022 since the company hired several high level executives last year.
In March 2021, Discord recruited former Pinterest executive Tomas’s Marcinkowski to join as its first-ever chief financial officer (CFO). It followed that high profile hire with the addition of ex-Netflix executive Leslie Kilgore and Block’s former CFO Amrita Ahuja to its board of directors.
The hiring of those former senior execs from top tech and digital firms have led some market watchers to believe that Discord’s IPO could happen sooner than later.
However, the company has yet to file any paperwork with the US Securities and Exchange Commission (SEC). It is likely to list on the New York Stock Exchange (NYSE) or Nasdaq exchange.
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How to buy Discord shares if and when the company lists
- Do your research on Discord
- Decide whether you want to trade or invest
- Open an account
- Search for Discord on our platform or app and open your position
If you want to buy Discord shares and own them, you'd open a share dealing account. If and when Discord lists in the US, we'll offer the stock on the same day.
That'll cost £0 commission if you've traded 3+ times in the previous calendar month, or £10 if you have not.
If you want to trade Discord shares with derivatives, you would open a spread betting or CFD trading account. Spread bets are commission-free, while CFDs cost $15 commission on US shares.
When trading, you do so using leverage. This means you may gain or lose money faster than you'd expect, as your position size is based on the leveraged amount, not your initial deposit. Trading also allows you to go short on stocks as well as long.
Learn more about how to invest in IPOs
What does Discord do and what is its business model?
Discord was launched in 2015 with the aim of solving ‘discord in the gaming community’, after founder Jason Citron experienced first hand how difficult it was to communicate with his team mates while playing games like Final Fantasy XIV and League of Legends.
Initially, Discord was launched without the intention of targeting the gaming community, but some gaming-related subreddit threads soon started to replace their IRC accounts with Discord accounts.
Following that, Discord became popular among esports and LAN tournament gamers, Twitch streamers, as well as Xbox Live users, owing to its low-latency chats and appealing user interface.
This success soon spilled over into the mainstream, with other communities – crypto traders, anime fans, etc – also adopting the platform for their own interests.
When Covid-19 hit, lockdowns boosted Discord’s monthly active users so much that 70% of Discord’s users were non-gamers by the end of 2020.
The app even changed its slogan from ‘Chat for Gamers’ to ‘Chat for Communities and Friends’ in March 2020.
Who are Discord’s competitors?
Discord’s main competitors include Slack, TeamSpeak and Telegram.
Both Discord and Slack have pretty similar user interfaces, with contacts on the left and ongoing conversations on the right.
However, what differentiates Discord from Slack (and TeamSpeak and Telegram), are how users and their respective communities communicate via public and private channels called servers.
Additionally, as mentioned earlier, Discord’s low-latency, lag-free capabilities make its voice over internet protocol (VoIP) functionality ideal for gamers and individuals looking for high quality, disturbance-free voice chats.
What is Discord valued at and what could the Discord share price be?
Discord raised $500 million in its latest funding round in September 2021. This lifted its valuation to $15 billion, according to PitchBook data. This is more than double its previous valuation of $7.3 billion in December 2020.
However, Fidelity, which is an investor in Discord through its mutual fund arm Contrafund, lowered the value of its Discord shares by 32%, from $550.62 a share in May 2022 to $373.65 a share in June 2022.
Discord had also previously turned down a buyout offer from Microsoft for $12 billion.
Discord’s official share sale price and valuation will be revealed once an IPO date is announced.
What is the outlook for Discord?
Thanks to the Covid-19 pandemic, Discord’s monthly active users burgeoned 15 times, from 9 million in 2017 to 140 million in 2021. By late 2020, the company reported that 70% of its user base was using its platform for non-gaming purposes. Registered users also reached 350 million in 2021.
As of now, Discord is used by 150 million users each month.
Revenue estimates also show that that the company achieved revenues of US$130 million in 2020, which is a 188% increase from 2019’s estimated revenue of US$45 million.
Analysts expect Discord to continue growing the number of servers on its database as it progresses to its IPO.
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