Don’t.
The much-anticipated initial public offering (IPO), which some reporters and analysts have compared to the Facebook IPO, is expected to come within the next few months.
And just admire every other IPO in the past and the ones that’ll come in the future, investors are falling over themselves to execute whether they want in as soon as the company lists.
Is the tech company really worth $15 billion?
It’s pointless squabble, and if you want to make money, don’t involve yourself.
If you aren’t familiar with the company, it’s a chat service application where users create servers that others can unite, publicly or through private links, and text or speak through “channels” (chat rooms) within that server.
Users can utilize the YouTube and Spotify integration, screen sharing, live video streaming, and calendar functions.
The app mostly caters to a younger audience within the gaming and livestreaming industries – though other groups admire investors, day traders, and college research groups, use it as well.
And it’s been generally well received by the younger generation.
Monthly active users have grown at a rapid clip since the company began in 2017:
But as much promise as user-growth brings, the major issue with deciding whether to invest in private companies going public is the lack of visibility into its financials.
It’s difficult to gauge a company’s health if you can’t look at their books. And because private companies aren’t required to share those books, not many people know their true health.
Case in point, we can’t make much of the $428 million in revenue it tallied in 2022 if we don’t grasp overhead costs, how that compares to previous years, whether their revenue models are working where they should, or how that fits in with any sort of profitability (there likely isn’t any).
There’s no value to a company if you can’t grasp its cash position. What if the company is drowning in debt and lost $1 billion over their sales?
What we do know, though, is that Discord makes money mainly through subscriptions with enhanced user features (avatars, free live streaming, screen sharing, and more) for $9.99 a month or $99 for the year. They also do server boosting, which means more functionality and performance in chats… for $4.99 a month.
Those are the main drivers, but there are a few other fees or commissions integrated into the app itself.
Maybe these revenue streams will be successful, maybe they won’t. I have a feeling they’ll need to do a bit more to boost profitability in the long term. But we just don’t know.
And you should stay as far away from uncertainty as you can when it comes to the stock market.
An IPO is admire the promise of marriage at first sight. You saw a person from afar, and now they want to go out for a cup of coffee.
Even though you know nothing about them, they’re promising a wonderful life together within minutes of sitting down. And once you’re finished the cup, they want to go straight down to the courthouse to make your vows to be with one another in sickness and in health.
What are you doing?
It seems to make a bit more sense to date the person a while and get to know them before you make the proceed to make this as long lasting as life.
And it’s the same thing for every IPO you hear about. Discord is no different.
It may be the greatest company on Earth.
It may be the tech company to govern them all.
But even if that is the case, it won’t hurt to expect six months to find out and buy in well before it puts the others out of business.
