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Discord decides to IPO, Microsoft Xbox deal rejected

by Mark Tyson on 21 April 2021, 13:11

Tags: Microsoft (NASDAQ:MSFT)

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Last month there were reports that gaming focused chat software maker Discord was being eyed up for takeover by various interested parties, including Microsoft, Amazon and Epic Games. Insider sources blabbed to the WSJ about Microsoft's willingness to hand over $10 billion to take over the company for the good of Xbox, but it now looks like these suitors will be able to keep their cash – or use some of it to buy shares when Discord sets up and schedules its stock market Initial Public Offering (IPO).

In case you need a catch-up, Discord is a chat and communications platform wildly popular with gamers, and with growing interest in other segments. Discord doubled its monthly active users to 140 million in 2021, and the app has 800,000 downloads per day. Its use among viral collaborative games like Among Us has helped in its booking popularity. Discord currently offers a free service but encourages users to go premium and subscribe to its enhanced Nitro offering.

Discord is looking for funding to improve and expand its offering / services for customers, and has recently been successful in raising up to $100 million in a Series H investment round. The scale of operations that Discord wants to build isn't cheap. This latest fundraising establishes a bottom line value for the company of $7 billion dollars.

The latest fundraising has been described by some parties as a 'pre-IPO round' for the privately-backed startup, notes TechCrunch. It is offering investors and institutions a way in before an IPO is scheduled which will likely be at a higher buy-in price, and who knows, its shares could be very warmly received.

HEXUS Forums :: 10 Comments

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I know Microsoft having Discord would have been a bad idea considering what happened to Skype and MSN.

But I'm still not sure IPO will be best fit for Discord because its primary focus will be monetisation and not being a great product (at my most negative).

Discord is a shocking bit of software (even for microsoft standards of late), I'd sooner get a few viruses than run discord.
Have to delay I agree, I've never understood the appeal of Discord.

As mentioned above too, Microsoft would have been a better option for customers then an IPO.

Whilst Microsoft are a big corp, they have been better recently, profits supported by their other ventures too.

Discord alone, will be underpressure from shareholders to make profit at any cost.

They were valued at about $6b not long back, Microsoft offered a decent chunk more. They gotten free publicity and the appearance they're worth considerably more than they actually are.

The shares could be extremely overvalued, nothing new there though.
Have to delay I agree, I've never understood the appeal of Discord.

Discord has recreated web forums but in an instant messaging format like using your phone or whatsapp though it is capable of more.

This has made it more popular with young people, particularly gaming communities making it the video games social network in ways that others are not. It's deeply intertwined with PC gaming and Twitch were everyone used it.

Basically web forums of old = discord of today without it needing to be public like reddit.
Basically web forums of old = discord of today without it needing to be public like reddit.

It's just the current proprietary Instant Messenger of choice really, and will eventually disappear, with open protocols such as IRC continuing as they always have.