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What will Discord's IPO share price be?

Published by: Lucien Paulemil
April 2, 2022 3:28 am

Founded in 2015, Discord is a communication platform that enables users to share files and chat through audio and video. 

While the platform started as a way for gamers to communicate reliably and conveniently, it has since expanded well beyond the gaming sphere: today, 70% of its 150 million monthly active users use the platform for non-gaming purposes, such as virtual classes, groups, clubs, and conventions. 

What are Discord’s annual revenues? 

In 2020, Discord brought in $130 million in revenues, three times what it made the year before. Despite the temptations of generating millions of dollars through paid advertising, Discord remains ad-free. However, that could change as new shareholders demand the company diversify its revenue stream.

Discord is a high-growth startup – a hot commodity in the investment world. 

Consequently, it is attracting the interest of the world’s biggest tech companies, which are cash rich and eager to diversify. This was not the first acquisition attempt, as Amazon, Twitter, and Epic Games have recently tried to buy out the company. In 2021, Microsoft extended a $12 billion buyout deal – Discord’s management refused the offer. 

What is Discord’s valuation?

Discord is coy about its finances, so we don’t know how much money Discord is really making. 

However, we do know that it raised $500 million in September 2021, which brought its valuation to $15 billion, more than double its valuation of $7.3 billion in December 2020.

As expected, investors genuinely want to know more about Discord’s potential IPO. For now, the board has not explicitly stated its intention to go public, but experienced investors know that most private startups raise capital on the public markets at some time.

The questions are: When will Discord go public, and at what price?

What will be Discord’s IPO share price?

It’s tough to say how the Discord IPO will be priced. 

First, it remains unclear when Discord’s management plans to take the company public. It’s plausible that the valuation could swell to $100 billion or more by the time the board feels prepared to go public. By the time they file the paperwork, the company’s valuation may have increased even more.

In addition, it is also unknown what percentage of the company will be sold to public investors. If management wants to keep majority control, they may sell just 10-20% of the company. If, on the other hand, they wish to raise as much capital as possible, they may decide to sell 40% of the company or more. 

Finally, the board will have to consider how many shares to issue. Issuing more shares will make the stock more affordable and enable retail investors to buy in, while issuing fewer shares will make the share price more expensive, thus favouring institutional investors.

How to invest in Discord

For now, Discord operates as a private company. As such, it is virtually impossible for retail investors to buy the company’s stock.

If Discord files for an IPO, some specialized brokers will offer investors the possibility of buying shares before the company goes public. Investors should remain informed to capitalize on the opportunity of purchasing shares before they hit the public markets. 

The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions.

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