Scribd IPO: Should you buy this online content stock?

  Summary 

  • Scribd is reportedly going public in a US$ 1 billion SPAC deal by the end of this year.
  • The online content service provider has more than one million paid users, representing a robust revenue model. 
  • Scribd’s stock to compete with rivals, such as Amazon.com Inc. and Spotify Technology.

Popular digital content platform Scribd Inc., which offers e-books, and audio and podcast series, is likely to go public in 2021.

The company is reportedly in discussion with financial experts and special purpose acquisition company (SPAC) for its initial public offering (IPO) of common shares. Scribd's IPO deal with a blank check firm could be worth around US$ 1billion. However, there is no official confirmation of this development. 

Scribd was co-founded in 2007 by Trip Adler, Tikhon Bernstam, and Jared Friedman. The US-based digital media firm had raised US$58 million from Spectrum Equity. The company was valued at US$ 450 billion in 2019. 

Once the company hits exchanges this year, it may compete with Amazon’s e-book division (AMZN:US, NASDAQ:AMZN). It will also go up against Spotify Technology (SPOT:US, NYSE:SPOT) with its music and podcast offerings. 

What is Scribd’s revenue model?

Scribd has almost 60 million content files on its website. The company primarily generates its revenue from subscription-based audiobooks, e-book, news magazines, and online collaborations. In music and movies, the company has collaborated with Tune In and MUBI. 

It expects to expand operations in the podcast segment on the back of rising demand for audio content. Currently, Scribd charges around US$ 10 per subscription for unlimited access to its products, excluding some exclusive titles. 

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Why should you buy Scribd IPO?

Scribd IPO is reportedly going live in the fourth quarter of this year. Investors can buy its equity on the back of booming online product consumption amid the COVID-19 pandemic. 

The company is likely to list under the communication category, and its sub-category will be diversified media. 

Scribd, also known as “Netflix of readings”, as it has over one million paying subscribers for its e-books like novels and magazines from major publishers. If it can maintain its sustainable growth model, it will mean healthy long-term gains for stockholders. 

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