Discord Stock: How to Invest Before the IPO

Learn how to invest in Discord stock before the IPO. Own a portion of Discord pre-IPO through Cathie Wood’s ARK Venture Fund, exclusively available on the Titan investing platform.

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Discord Stock IPO News

01/17/2023: Discord acquires Compliment App Gas
08/21/2022: Is Discord really worth 32% less today than it was last year?
05/17/2022: Discord Ranked #13 on CNBC’s Disruptor 50 List
03/14/2022: Bloomberg: Discord Interviews Banks for Possible Direct Listing
09/15/2021: Confirmed: Chat App Discord Is Worth $15 Billion After New Funding
09/04/2021: Danny Devito, Discord and the Future of Social Media
08/24/2021: Dragoneer Expected to Lead Discord Round at $15 Billion Value
06/28/2021: Discord acquires augmented reality startup Ubiquity6
04/21/2021: Messaging platform Discord reportedly ends sale talks with Microsoft
03/23/2021: Microsoft Corp. is in talks to acquire Discord for more than $10 billion
12/17/2020: Discord confirms raising $100M at a valuation of $7B

What is Discord?

Discord is a digital platform used to create online communities. It uses voice (VoIP), video, chat, text, and media to enable private groups or people with like-minded interests to meet online securely and privately.

It was spawned from the video game industry and associated subreddit communities but has since expanded beyond gaming. Discord’s accelerated growth is due, in part, to privacy concerns with social media platforms such as Facebook.

Users can access Discord via software download, web browser, or mobile phone app.

Discord is not a social media platform. Rather, a software package of communication tools that serve communities of similar interests, more similar to Slack than Facebook.

The company was founded by Jason Citron and Stanislav Vishnevsky. The software was released in May of 2015.

In 2021, Discord was #3 on CNBC’s Disruptor List.

Here’s a demo video by Discord that explains how the platform works using a fictional dodgeball team.

Is Discord Stock Publicly Traded?

No, Discord is still privately owned.

The shareholders include founders, early investors (venture capital firms), and employees.

Discord has raised more than $450 million since its founding. The most recent raise was $100 million in December 2020.

Reporting by Katie Roof at Bloomberg in August 2021 suggests the next round could be as high as $500 million, valuing the company at $15 billion.

Additional reporting by Katie Roof indicates Discord is exploring a direct listing IPO in 2022. The company is well capitalized and may not need to raise new funds.

Prominent venture capital firms invested in the company include YouWeb’s 9+ incubator, Accel Partners, Benchmark, Tencent Holdings, Greylock Partners, Index Ventures, Greenoaks Capital, and Sony.

Can you Invest in Discord Equity Today?

Yes.

The stock does not trade publicly. But you can own a portion of the company pre-IPO via the ARK Venture Fund, available exclusively on the Titan investing platform.

When is the Discord IPO Date?

The Discord IPO date is currently unknown. A report in March 2022 suggested an IPO could come that year. But a 2023 or 2024 IPO now seems more likely.

The company is operating from cash flow and previous funding rounds.

We won’t get a better sense of when the Discord IPO date is until some of the following things happen:

The company announces another funding round
New information about the Discord IPO date leaks to the financial press
Discord announces (or leaks) that it filed an S-1 confidentially with the SEC
The SEC releases a publicly available Discord S-1 filing
Announcement (or press leak) of a forthcoming SPAC merger
Discord selects a lead underwriter or banking partner for the IPO

These milestones and announcements will serve as supporting evidence of progress toward a forthcoming public offering.

Even when the company and SEC publicly release the S-1 filing, we still won’t know a firm date. However, the IPO date typically occurs a month or two after the S-1 is released to the public.

Bookmark this page for the latest Discord stock and IPO news.

Will There be a Discord SPAC Merger?

At this stage, a SPAC merger is possible.

But the recent slowdown of SPAC mergers plus the rapidly increasing Discord valuation suggests a traditional IPO is more likely.

A SPAC is a special purpose acquisition company, also known as a blank check company. They are shell companies designed to help established businesses go public without a traditional IPO.

The SPAC company merges with the established company and takes on the established company’s name. It’s also known as a reverse merger.

Using a SPAC to go public allows the company to skip the complicated and expensive IPO process.

Not all companies are ready to IPO, making SPACs an attractive alternative to an IPO where the company can still raise new funds.

However, the more established a company is, the more resources it can hire to facilitate the traditional IPO process.

When early investors and employees need liquidity, and the company generates more significant revenue, the company will decide on the best way to go public — a traditional IPO, direct IPO, or SPAC merger.

What is the Discord Stock Price?

Since Discord is not publicly traded on a stock exchange, there is no Discord stock price yet.

The company and its underwriters won’t publicize an estimated IPO price range until after the initial S-1 filing is made with the Securities and Exchange Commission (SEC).

What is the Discord Stock Symbol? Discord Ticker?

Discord has not yet submitted public filings to the SEC. Therefore, the Discord stock symbol remains unknown. We can only speculate.

Here are some possibilities that appear to be available in the U.S.:

DSCD
DISC
DSC
DC
DCRD
CORD

Where can I find the Discord S-1 Filing?

The Discord S-1 filing won’t be publicly available until released. Once it is public, we’ll post it here.

You can find a real-time SEC feed of the latest IPO filings from other companies on the recent S-1 filings page.

Will Discord Stock be a Motley Fool Stock Advisor Recommendation?

We won’t know until after the IPO if Discord will be a Motley Fool Stock Advisor recommendation. However, Discord fits the mold of high-growth, disruptive business models that the Fool typically recommends.

Discord will undoubtedly be on their radar once it goes public.

Fool newsletter subscribers are notoriously long-term-minded and rarely sell, meaning the right stocks will continue to rise over several years.

Discord may also receive a recommendation by the Motley Fool Rule Breakers (Rule Breakers review) newsletter or other premium services. Both services have handily beaten the broader market since the early 2000s.

Read this Motley Fool Stock Advisor review to learn about the stock selection methodology and about how you can participate in excellent returns.

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How to Buy Discord Stock

Generally, it’s challenging to acquire shares of high-demand IPOs. Most investors will need to settle for buying the stock after it begins trading.

IPO underwriters typically give their best customers access first, then allocate shares to certain institutions and brokers often tied by professional relationships.

When the largest brokers receive IPO shares, they divvy them up amongst their eligible customers, prioritizing their most valued customers first (wealthiest).

For high-demand deals, most investors will not get shares.

A few brokers have partnered with the IPO investing app ClickIPO to give access to individual investors.

Investors are encouraged not to flip shares (sell them immediately after the IPO).

Though ClickIPO has not demonstrated the ability to allocate app users with high-demand IPO shares, they’ve executed more than 200 IPOs and secondary offerings on its platform.

For individual investors without a high net worth, ClickIPO and its partner broker TradeStation is the most likely chance of participating in IPOs since the demise of LOYAL3 and Motif Investing.

Robinhood and SoFi have also started offering IPO access, but deal-flow hasn’t accelerated yet.

With that, here are four potential ways to own Discord Stock:

Buy Discord stock Pre-IPO via Titan or other investing platforms
Buy Discord stock after the Discord IPO
Buy Discord stock during the Discord IPO through a broker
Directed Share Program

1. Buy Discord stock pre-IPO via Titan or other investing platforms.

As of early November 2022, the ARK Venture Fund led by Cathie Wood has purchased a stake in Discord.

All U.S.-based investors are now eligible to invest in the fund for a $500 minimum investment via the Titan Investing App. This fund is exclusively offered at Titan.

You will only own a small portion of the company. But the fund is a diversified way to own a pool of pre-IPO startups. You’ll gain access to several high-growth companies with one purchase.

If you are an accredited investor, there may be additional options.

Founders, early employees, and investors are often in a difficult predicament. They own valuable shares of a company that doesn’t trade publicly.

These shareholders might have multi-million dollar net worths because of their stock holdings, but the stock is not liquid because it doesn’t trade on an exchange.

A few platforms have evolved to allow these individuals to liquidate their holding before the IPO.

Equitybee provides accredited investors access to pre-IPO startups by funding employee stock options. In exchange, investors gain a portion of the future stock value.

Other prominent investing platforms include Linqto, EquityZen, and Forge. Learn more about pre-IPO investing here.

These sites bring liquidity to an otherwise illiquid asset. Accredited investors (those with invested assets > $1,000,000) may join these sites and attempt to buy company shares when they become available.

The shares are only offered to accredited investors because the company’s financials are not publicly filed with regulators yet, increasing the investors’ risk.

High demand for high-profile companies will lower your chances of acquiring shares.

The author considers this a low-likelihood way to acquire shares. However, some readers have written me to share their success stories. Pre-IPO investing marketplaces are gaining in popularity with selling shareholders.

2. Buy Discord stock after the Discord IPO

Since acquiring IPO shares is almost always challenging for individual investors, the easiest way to own Discord stock is to wait for the IPO to complete.

Realistically, unless your brokerage account is worth more than $1 million and your broker regularly receives IPO allocations, you are unlikely to get in on high-demand IPOs.

Though several smaller brokers are offering IPO access, share supply for high-demand deals is tight.

In some cases, patient investors can buy the stock at or below the IPO price. This is not always true.

The Airbnb IPO, for example, soared and never looked back. But Robinhood fell on the IPO date and days after before recovering.

Spending significant effort to acquire IPO shares may not be worth it in the end. You may also spend time and effort to obtain shares but only receive a small allocation, limiting upside gain.

Though IPOs can provide one-day gains north of 20%, even up to 100% in rare cases (such as Airbnb and Doordash), the most significant gains will come during the decade following the IPO if the company is genuinely disruptive.

Take, for example, Netflix, Amazon, or Tesla. You could have bought the stock years after the IPO and still experienced gains of more than 1,000%

If you’re an investor that wants to buy Discord stock for the long-term, consider opening a position after the IPO and averaging down if the stock falls.

Short-term traders may angle to acquire IPO shares and hope for a short-term pop.

3. Buy Discord stock during the Discord IPO through a broker

Ambitious investors can position themselves to invest in the Discord IPO once it arrives.

Your chances of getting IPO shares depends on four factors:

IPO demand
Your broker and eligibility
Your assets under management (AUM) at the broker
Propensity to flip shares

As IPO demand increases, the chances of receiving IPO shares decreases. Therefore, the IPOs that are most interesting to the masses are the hardest to access.

Most online brokers do not offer IPO shares. Check directly to see if yours does, or look at our list of best brokers for IPO investing.

Legacy brokers like Fidelity and Charles Schwab have minimum eligibility requirements and penalties for flipping shares (selling shortly after the IPO).

But even if eligible, the brokers must sub-allocate whatever limited shares they receive from the IPO underwriters.

This process is non-transparent, but priority is likely given to the wealthiest investors first.

For example, if your account balance is $500,000, and that makes you eligible according to terms, the broker may only have enough IPO shares to distribute to customers with assets of $3,000,000 or more.

This brings us to ClickIPO.

ClickIPO is a smartphone app that partners with TradeStation (through the app) to deliver IPO access to ordinary investors.

There is no minimum account value required.

ClickIPO prioritizes IPO share distribution to investors who are less likely to flip shares and thus considered more desirable IPO beneficiaries (in theory).

Therefore, ClickIPO offers a value proposition to underwriters and newly public companies.

Though quick profits from IPOs is one way the large underwriter reward whale-sized clients.

Click here to subscribe to Access IPOs and download the free 15-page eBook, How to Invest in IPOs – A Fundamental Guide for Ordinary Investors, which provides more detail on this dynamic.

Joining a broker that offers access to IPOs does not guarantee a share allocation, especially in high-demand IPOs. You are probably better off waiting for the company to start trading after the IPO.

4. Directed Share Program

Another possibility is a directed share program.

Sometimes when companies file their S-1 SEC filing (to begin the IPO process), they include a directed share program for executives, affiliates, and other people who helped the company grow.

Since Discord’s success is due, in part, to its dedicated user base, it’s possible the company may offer IPO shares to them.

This has happened before.

Uber offered shares to drivers that completed a certain number of trips.

GoPro offered shares to its email list.

Airbnb offered IPO shares to hosts.

Robinhood offered shares to its customers.

Considering Discord’s vast and growing customer base, pay attention to the S-1 filing for a directed share program.

Bookmark this page for more information as the IPO approaches.

Best Brokers to Buy Discord Stock

What is the best online brokerage for buying Discord stock when it begins trading?

If you want to attempt to participate in select IPOs, TradeStation is the best low-minimum investment IPO broker for investors with assets under $100,000.

See the complete list of best brokers for IPO investing here.

Long-term buy-and-hold investors may prefer a broker not as geared toward frequent trading.

As an individual investor, you’ll want to open an account with a commission-free online broker. That way, you’ll invest most of your money instead of waste it on fees.

I’m a big fan of the online brokerage M1 Finance. M1 Finance is a reliable and robust, no-fee online broker for beginner to advanced investors.

As your investing skills and portfolio mature, M1 is one of the best platforms to scale.

Investing in stocks is 100% free on the platform. They also offer an integrated checking account and low borrowing rates. Read my complete M1 Finance review here.

The platform is more intuitive than traditional brokers because it’s built on a modern technology platform. You create portfolio “pies” that contain all the stocks and ETFs you want to own and in what percentages.

Add Discord stock to your portfolio pie once it begins trading.

M1 Finance does not offer IPO access. But it’s my favorite for long-term investing, which is my preferred strategy for disruptive IPO companies.

Learn More about M1 Finance

* Disclosure: The web page contains affiliate links from our partners. If a reader opens an account or buys a service from a link in this article, we may be compensated at no additional cost to the reader. Opening an account with a broker that provides access to IPOs does not guarantee the customer allocations of specific IPOs. The author is long TSLA, ABNB, CMG, AMZN, HOOD.