Discord Turns Down Microsoft Offer, Will Launch IPO

Bloomberg and The Wall Street Journal are independently reporting that Discord has turned down Microsoft’s acquisition offer and will launch an initial public offering (IPO) instead. The talks broke down after Discord rejected a $12 billion offer from the software giant.

Rumors of Microsoft’s interest in Discord first appeared in March, with The Wall Street Journal later reporting that Microsoft was in “exclusive” talks to buy the chat service just a few days later as other suitors like Epic Games and Amazon backed down. Microsoft was originally looking at spending about $10 billion on Discord, so it would appear that $12 billion was its best offer.

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But even at the height of Microsoft’s activity, there were reports that Discord was just pumping up interest in the firm ahead of an IPO. And that now appears to be the case.

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Conversation 17 comments

  • scovious

    20 April, 2021 - 5:07 pm

    <p>Brace yourself for the advertisements and selling off of user data. I'll be taking a second look at Guilded.</p>

    • red.radar

      Premium Member
      21 April, 2021 - 1:13 am

      <blockquote><em><a href="#624017">In reply to scovious:</a></em></blockquote><p>is Guilded’s business model any better? </p>

  • jwpear

    Premium Member
    20 April, 2021 - 5:30 pm

    <p>Wow! I have no idea if this valuation was correct or not, but this kind of puts a bad taste in my mouth for the Discord team. This really felt like a good fit for both. Microsoft has gaming AND enterprise.</p>

    • anoldamigauser

      Premium Member
      21 April, 2021 - 10:46 am

      <blockquote><em><a href="#624021">In reply to jwpear:</a></em></blockquote><p>The problem is that gaming and enterprise is not the same thing as peanut butter and chocolate. It is not necessarily a combination that makes sense.</p>

  • madthinus

    Premium Member
    21 April, 2021 - 3:17 am

    <p>They wanted the biggest payday possible. So IPO it is. </p><p><br></p><p>I wonder if Microsoft is really aggressive like they where with teams if they could replicate this internally. </p>

    • Chris_Kez

      Premium Member
      21 April, 2021 - 7:23 am

      <blockquote><em><a href="#624075">In reply to madthinus:</a></em></blockquote><p>What Microsoft can't replicate is the existing user base of Discord. They could make a clone, or even a slightly better version, but not replicate the penetration and engagement. See their failed Mixer experiment. They attached that to Windows and to Xbox and didn't go anywhere. </p>

  • marshalltm

    Premium Member
    21 April, 2021 - 4:19 am

    <p>When this is trading for $3b market cap in 5 years, we will all think back to this moment. This is like Real Player or Point Cast or Yahoo or Rovia or Snapchat or Slack. The hottest hottest thing with growth curves to the moon. Then it is just a normal company with lots of competition.</p><p><br></p><p>How Microsoft can monetize this is different than how they can monetize it themselves.</p>

    • wright_is

      Premium Member
      21 April, 2021 - 5:06 am

      <blockquote><em><a href="#624081">In reply to marshalltm:</a></em></blockquote><p>On the other hand, does it really need to be part of a big business? I think the stock market is so stuck on growth and bigger is better that it has lost track of sustainability and staying true to your roots.</p><p>There are plenty of examples of products, where the company behind them are now part of something "bigger" (worth more on the stock exchange), yet the product has suffered as a result.</p><p>LastPast springs to mind, as one of the most recent to faul foul of this race to sell out to the highest bidder and be gobbled up by a bigger entity. It has lost many of the "features" that made it so successful, such as sacrificing paying customers' privacy by sticking additional tracking domains into the code! This breaches the whole concept of trust that LastPass was built up on.</p>

      • Chris_Kez

        Premium Member
        21 April, 2021 - 7:21 am

        <blockquote><em><a href="#624087">In reply to wright_is:</a></em></blockquote><p>Agreed. It is a shame to see companies abandon their original mission in search of the almighty dollar. Then again, Discord has probably taken on a bunch of investors who are explicitly giving them capital in expectation of a large financial windfall. Founders sow the seeds when they go looking for VC money. </p>

        • anoldamigauser

          Premium Member
          21 April, 2021 - 10:42 am

          <blockquote><em><a href="#624095">In reply to Chris_Kez:</a></em></blockquote><p>I agree that it is a shame when a company changes its products and features in order to monetize their userbase; but I think the "original mission" is to make a ton of money. Certainly that is the goal of the VC investors and the founders.</p><p>Very few people found companies in the hopes of earning a comfortable living. They are hoping for a windfall.</p>

          • dbonds

            Premium Member
            23 April, 2021 - 10:35 am

            <blockquote><em><a href="#624169">In reply to AnOldAmigaUser:</a></em></blockquote><p><br></p><p>$12b is a heck of a "windfall". 😉 Realizing that there are other debts to pay off, I suspect the original founders of Discord would of come out very well. Hope their IPO goes nearly as well financially for them as this would have.</p><p><br></p><p>I suspect their decision was much more around the "control their own destiny" aspect than the financial aspect — otherwise, we'd likely be reading about a deal being completed with MSFT.</p><p><br></p>

        • brothernod

          Premium Member
          21 April, 2021 - 2:40 pm

          <blockquote><em><a href="#624095">In reply to Chris_Kez:</a></em></blockquote><p>I don't know, i was really excited about this so I could maybe finally post more than one image to a chat without having to pay extra.</p>

  • Indrek Ploompuu

    21 April, 2021 - 7:22 am

    <p><span style="color: rgb(0, 0, 0);">Microsoft already has all the technology, but Discord's userbase would have kickstarted a fading business category. In a way, D</span>iscord could have been the Microsoft Teams for consumers. </p>

  • crunchyfrog

    21 April, 2021 - 9:47 am

    <p>When I think of how Yahoo turned down Microsoft and Nokia accepted a Microsoft offer, maybe this is for the best.</p>

    • codymesh

      22 April, 2021 - 2:14 am

      <blockquote><em><a href="#624160">In reply to crunchyfrog:</a></em></blockquote><p>But also like Yahoo on hindsight, maybe Discord will also regret not taking up the offer.</p>

  • crunchyfrog

    21 April, 2021 - 9:50 am

    <blockquote><a href="#624125"><em>In reply to Pungkuss:</em></a><em> In many cases, these small companies position themselves to be hoovered up by big companies just to cash out for those at the top.</em></blockquote><p><br></p>

  • j5

    Premium Member
    21 April, 2021 - 3:43 pm

    <p>Bye bye X-Cord :(</p>

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