Stack Overflow operates a popular question-and-answer website for software developers and other professionals. It's one of the top 200 websites in the world, with more than 100 million visitors each month.
Like many companies, Stack Overflow is seeking to tap into the enormous potential of artificial intelligence (AI). In 2023, it launched Overflow AI to integrate generative AI into its public platform, Stack Overflow for Microsoft's (MSFT +0.57%) Teams, and other new products.
IPO
Step 3: Research related companies
It's essential to thoroughly research a company before buying its shares. You should learn how it makes money and study its balance sheet and other factors to ensure you have a solid grasp on whether the company can grow value for its shareholders over the long term.
You should also research related companies. Some notable companies related to Stack Overflow are Prosus, Udemy, and Tencent. Investors should take the time to research these and other similar companies before buying shares.
Step 4: Place an order
Once you've opened and funded a brokerage account, set your investing budget, and researched the stock and its competitors, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill in all the relevant information, including:
- The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
- The stock ticker (PROSY for Prosus, UDMY for Udemy, and TCEHY for Tencent).
- Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order because it guarantees you buy shares immediately at the current market price.
Once you complete the order page, click to submit your trade and become a shareholder in a company related to Stack Overflow. Investors would follow a similar process to buy an IPO stock like Stack Overflow if it ever goes public. Once shares become available, fill in your brokerage account's order page with the company's selected stock ticker and submit your trade.
Shareholder
Is Stack Overflow profitable?
Stock Overflow's owner, Prosus, provides some financial information on the company in its annual report. In its 2023 annual report, Prosus noted that Stack Overflow had contributed $84 million in revenue since it acquired the company in its 2022 fiscal year.
The report also highlighted that total bookings had increased 37% while annual recurring revenue had surged almost threefold. By early 2023, Stack Overflow was generating $55 million in annual recurring revenue. However, Prosus noted that Stack Overflow was losing money, including contributing $84 million in trading losses since its acquisition.
It pointed out that the company's trading losses had increased due to investments in engineering and product development initiatives, sales headcount and marketing expenses, and administrative costs related to growing the business. These losses and a decline in technology company valuations caused Prosus to write down $560 million of its investment in Stack Overflow.
Stack Overflow took steps to address its lack of profitability in 2023. It reduced its spending, including cutting 28% of its workforce in late 2023. The company hopes that the spending reductions and its investments in product innovation, like Overflow AI, will drive robust revenue growth and improved profitability in the future.
The bottom line on Stack Overflow
While you can't invest directly in Stack Overflow, you can buy shares of its parent, Prosus. You could also consider investing in related companies (like Udemy or Tencent) or an ETF to gain exposure to the same trends driving its growth. With lots of growth ahead for edtech, AI, and other technologies, these investments could pay off in the coming years.
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