Given that Discord has emerged as the leader in online communication, primarily for gamers and communities everywhere, it is no coincidence why interest has risen to its stock. Still, it poses a tricky proposition for would-be backers seeking to sink money into an unproven privately-held company with no apparent IPO in sight. In the following post, you can learn about the current standing of Discord stock & the types of opportunities there are to invest in it. How accredited and retail investors can play their game.
What is Discord?
Launched in 2015, Discord is a voice, video and text based chat platform. Although it was initially made for gaming, different online societies like educationalists, business etc. have started using this. The accessibility of its user interface, low latency audio features and a Freeware approach with opt-in payment premium feature in Pandora’s Box form as Discord Nitro probation contributed to the growth. Magician Ratios: Even though the platform is nearing profitability, Snap stock has historically been a highly speculative proposition.
Current Status of Discord Stock
Even in 2024, Discord still operates as a private company so you cannot buy it on exchanges (such as NASDAQ or NYSE). To date, the company has gobbled up almost $ 1 billion of investor cash — with Sony, Tencent and Dragoneer Investment Group being among those high-profile names who led its previous rounds. Those investments have helped push the value of Discord, which was last valued at around $15 billion when it raised funding in December.
How to Invest in Discord Stock
To be fair, there’s that private equity market in Discord and the associated VC rounds open to (mostly) accredited investors. Below are the main ways to get involved with Discord.
Invest pre-IPO via Private Marketplaces
There are platforms through which accredited investors can buy Discord shares, like EquityZen, Hiive and Nasdaq Private Market. These platforms allow early employees or investors of the company to sell shares in advance before going public. But supply is limited and prices can vary hugely between how much demand there is for them, depending on which mood the market seems to be in.
Investing through Venture Capital Funds
Retail investors can achieve indirect exposure to Discord by investing in mutual funds or exchange-traded products that own shares of private companies. One of the fund’s biggest positions, for instance, is Discord in The Private Shares Fund (PRIVX) Still, this is less of a bet on Discord itself and more an opportunity to invest in what would likely be just one stock in a high-growth, VC-backed basket.
Invest in Companies that Invested into Discord
A more indirect approach would be to invest in public companies that have an equity stake in Discord. Sony Interactive was one of the companies that took part in Discord’s Series H fundraising round, as well Tencent Holdings which invested during a previous funding stage. Yet exposure to Discord is minuscule compared with these companies’ total market capitalization.
Waiting for the IPO
For the majority of investors, an IPO would be one of the most direct ways to buy stock in Discord. While there is no foolproof date, Discord will likely join the public bandwagon in coming years. QIBs can access the IPO through their primary brokerage accounts.
Challenges and Risks
Now obviously, Investing in Discord isn’t completely Risk-Free.
Lack of Profit: Despite its massive user base, Discord has not been profitable yet. Its revenue model is heavily dependent on their Nitro subscriptions, and its scalability might not be a long-term force to drive a similar return in the future. It is risky for investors to invest in a company that has no profit or does not know when it will achieve profitability, especially if the company encounters delays and bottlenecks of growth.
Regulatory & Ethical Hurdles: Discord has been criticized for enabling the coordination of extremist groups, and this exposure could open them up to regulatory scrutiny. The company has already worked to remedy this, but the threat of harsher regulations or public opinion is a potential worry for shareholders.
Competitive industry: Discord operates in a competitive industry where the firm faces competition from rivals like Microsoft Teams and Slack as well as various social media platforms such Facebook, Twitter. Such competition could ultimately suppress Discord’s market share and in turn its ability to top up new users or monetise the platform.
Also Read: Understanding the CS Service Center VIP in Finance
Conclusion
For those who love fast-growing companies and have an interest in investing, especially tech-based securities, Discord presents itself as a very attractive investment opportunity. Yet, you should not ignore the dangers to investing in a private unprofitable company. Juice and EquityZen are two deep tech platforms where you can buy Discord stock pre-IPO for accredited investors whereas retail investors will have indirect reservations available through other means of venture capital funds or similar public companies. Like any investment, you should do your own research and see how it will affect the entire situation of their long-term plan.