Stability AI Stock: IPO or Acquisition Candidate?
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Table of Contents
Recent Stability AI News
12/09/2024: CEO says business growing by ‘triple digits’ and no debt
05/15/2024: Stability AI Discusses Sale
04/18/2024: Stability AI lays off 10 percent of its workforce
03/22/2024: CEO Emad Mostaque Plans To Resign
Older news…
What is Stability AI?
Stability AI is an open-source generative AI startup that builds and shares AI models for imaging, 3D, audio, and language. Founded in 2019 and headquartered in London, U.K., Stability AI’s models empower creators and developers to build extraordinary applications.
Their mission is to:
Build the foundation to activate humanity’s potential.
The company places significant emphasis on AI transparency and safety through a commitment to openness.
Stability AI is best known as the creator of Stable Diffusion, a text-to-image open-source model available for developers on Hugging Face. Though committed to transparency and open source, its venture capital investors have expressed concern about the company’s financial future. OpenAI’s Sora could also harm its reach.
Here’s a demonstration of how Stable Diffusion can integrate with existing graphic design and video applications.
Is Stability AI Stock Publicly Traded?
No. Stability AI is a private company.
Who Owns Stability AI?
Stability AI is a venture-backed startup owned by the founders, employees, and venture capital firms.
The company completed its latest funding round in October 2022, raising $101 million. Venture capital partners include Coatue, Lightspeed Venture Partners, and O’Shaughnessy Ventures LLC.
Coatue has raised concerns about Stability AI’s financial security and urged its CEO, Emad Mostaque, to step down and sell the company.
What is the Stability AI Valuation?
The last confirmed Stability AI valuation is $1 billion based on the October 2022 funding round.
The company looked to raise funds at a $4 billion valuation in March 2023 but failed to secure equity financing. Instead, it raised funds via a convertible note in June 2023. It has also tapped Intel for funds.
Stability AI Acquisition
Bloomberg reported in November 2023 that Stability AI has spoken to potential suitors about an acquisition due to investor pressure on the leadership to step down.
AI startups Jasper and Cohere were reported as potential acquirers, though none of the parties involved commented.
When is the Stability AI IPO Date?
The Stability AI IPO date is currently unknown and may not occur at all.
The company was reported to be exploring a sale in late 2023 amid venture capital pressure applied toward Stability AI leadership.
Stability AI will need to accelerate revenue growth or prove to private investors it can grow independently before raising new private funds, let alone pursuing an IPO.
At this stage, a Stability AI IPO is unlikely, but its prospects could change with news of a fresh private financing round.
What is the Stability AI Stock Symbol?
There is no Stability AI stock symbol yet because it is a private company.
Here are a few Stability AI ticker suggestions that are available in the U.S.:
- SBTY
- SBAI
What is the Stability AI Stock Price?
A public Stability AI stock price does not exist because the company is private.
Private bid and ask market data provided by Hiive and other pre-IPO marketplaces in February 2024 indicates limited private share transactions in recent months.
How to Invest in Stability AI Stock
Stability AI may be exploring a sale, which could limit the availability of private shares.
However, if the company pursues another private financing round, more shares could become available on pre-IPO marketplaces.
1. Access Stability AI stock via pre-IPO investing platforms
The author has limited opportunities to invest in Stability AI stock on prominent pre-IPO investing platforms.
For direct ownership and private stock estimates, investors can monitor platforms like Hiive. Other pre-IPO platforms, including EquityZen, Forge Global, and Linqto, may also have availability.
Signing up for online access to pre-IPO data, deal alerts, and expressing interest in currently unavailable startups is free.
Non-accredited investors can access shares of pre-IPO companies via venture capital funds.
The Fundrise Innovation Fund (review) is a fund that provides access to pre-IPO startups. There’s a $10 minimum investment.
However, investors cannot select individual pre-IPO companies via these funds, and Stability AI stock is currently not present in either portfolio.
Check out our list of top pre-IPO investing platforms for current share availability across platforms.
Please note: This is a testimonial in partnership with Fundrise. We earn a commission from partner links on AccessIPOs.com. All opinions are my own.
2. Buy during the IPO through a participating broker
A Stability AI IPO is unlikely at this stage in the company’s growth. Its venture capital investors are unhappy with its financial position and is encouraging a sale.
If the company fails to find a suitor, it may pursue another private financing round, which could put it on a path to an IPO. However, it must prove a viable business model first.
Being an open-source AI company, this may be a challenge.
I would expect at least one additional private funding round to be completed before Stability AI would pursue an IPO. An acquisition is the more likely outcome based on the November 2023 report.
In the event of an IPO, most retail investors will not receive IPO shares. Savvy retail IPO investors may find opportunities to invest during the IPO when it arrives — acquiring shares at the IPO price the day before the stock begins trading on the open market.
The following online brokers give customers free access to IPOs, even with low account balances:
Check out this list of best brokers for IPO investing to learn more about IPO access for retail investors.
3. Buy the stock after the IPO
For seasoned investors like many of our readers, gaining access to pre-IPO shares or securing an allocation during the IPO, potentially years down the road, is somewhat uncommon.
However, the waiting game can be worthwhile. The IPO filing opens a gateway to valuable financial insights, and each passing quarter adds more depth to the company’s overall performance.
Often, IPO stock prices soar, especially for companies in high demand. Timing is key — being an early player can lead to lucrative gains when strategically selling during a peak.
For those without IPO access, the post-IPO temptation to grab shares at inflated prices is real. Resist the urge to chase these overpriced shares right out of the gate.
History shows that stock prices often dip after the initial enthusiasm, creating optimal entry points for savvy investors.
In this game, selectivity and patience are your allies. The most groundbreaking companies tend to command higher valuations a decade down the line. So, resist the urge to follow the crowd and focus on the long game for potential lasting wealth.
News Archive
03/20/2024: Key Stable Diffusion Researchers Leave Stability AI
11/29/2023: Stability AI Explores Sale as Investor Urges CEO to Resign
11/09/2023: Stability AI Gets Intel Backing in New Financing
10/24/2023: Stable Audio Named One of TIME’s Best Inventions
06/28/2023: Stability AI Secures Convertible Note After Fundraising Struggle
03/03/2023: Stability AI looks to raise funds at a $4B valuation
10/17/2022: Stability AI Announces $101 Million in Funding
Conclusion
Investors become interested in buying companies riding extraordinary macroeconomic and technology trends (AI, imaging).
However, retail investors may find it challenging to acquire ownership in Stability AI because its valuation is only around $1 billion, so private shares are limited. If the company succeeds in raising more private funds, pre-IPO shares may become available.
Pre-IPO investing platforms have opened more opportunities for retail investors, but I have yet to see easy access to Stability AI shares.
If you’re interested in more direct investment opportunities, monitor pre-IPO platforms such as Hiive for availability.
Stability AI may be multiple years away from a public offering or acquisition as a relatively new company (founded in 2019) and still developing new products. In the near term, an acquisition is a more likely outcome since the CEO has already had discussions with other startups.
A larger technology company could also sweep in to acquire the intellectual property.
Good luck if you wish to buy Stability AI stock before the Stability AI IPO. Invest in pre-IPO and IPO companies at your own risk.
Craig Stephens is a former IT professional who left his 19-year consulting career at the IRS to be a full-time finance writer. A DIY investor since 1995, he started Access IPOs in 2016 to provide a resource for ordinary investors pursuing access to IPOs. Craig studied Finance at Michigan State University and lives in Northern Virginia with his wife and three children. Learn more about Craig.
Risk Statement: Investing in IPOs and pre-IPO startups involves significant risk. Do not invest in companies based solely on what is included in this article. Only invest in IPOs and pre-IPO companies with money you can afford to lose. Access IPOs is for informational purposes only. Mentions of specific investments should not be construed as financial advice. Conduct personalized research and consider consulting with an investment advisor before investing.
