Can You Buy Twitch Stock Pre-IPO? Here's What You Need to Know

Is Twitch publicly traded?

Twitch is not publicly traded, but it's owned by Amazon, which is a publicly traded company. Amazon acquired Twitch for $970 million in 2014. Twitch reportedly fielded a $1 billion offer from Google parent company Alphabet (GOOG -0.24%)(GOOGL -0.29%) at the time. Vox reported that Twitch ultimately went with Amazon, believing the move would provide it with more independence and support.

When will Twitch IPO?

Twitch has no plans for an initial public offering (IPO). It's a subsidiary of Amazon (AMZN -0.72%), so you can't buy Twitch stock. But if you want to invest in Twitch, buying shares of Amazon will provide exposure to Twitch.

Is Twitch profitable?

Twitch laid off about one-third of its workforce in January 2024. At the time, Twitch CEO Dan Clancy said, "I'll be blunt: We aren't profitable at this point."

Amazon doesn't publicly disclose revenue specifically for Twitch, but the Wall Street Journal reports that Twitch generated roughly $2 billion in advertising and commerce revenue in 2023.

Twitch saw its popularity skyrocket in 2018 due to the success of the game Fortnite and again during COVID-19 lockdowns. However, the platform has struggled as users have spent less on paid subscriptions and have also shifted their preferences toward shorter-form video content. The number of hours spent on Twitch globally dropped to less than 21 billion in 2024 after peaking at 24 billion in 2021, the Wall Street Journal reported.

Alternatives to Twitch

It's not possible to buy Twitch stock since it is owned by Amazon. However, you can invest in stocks of similar publicly traded companies, such as the following. (Note that if you're looking to invest in an IPO company ahead of its stock market debut, you'll need to be an accredited investor and buy shares through a platform like EquityBee or Linqto.)

1. Amazon

Since Twitch is an Amazon subsidiary, buying shares of Amazon is the most straightforward way to invest in Twitch. As of this writing, Amazon ranked No. 5 on the list of largest companies by market cap. It generated net sales of almost $638 billion in fiscal year 2024.

According to a Wall Street Journal article in mid-2024, Twitch accounted for less than 0.5% of Amazon's revenue. So, while investing in Amazon makes you an investor in Twitch, make sure you're confident in Amazon and the other businesses it owns since Twitch barely moves the needle for Amazon's bottom line.

2. Alphabet

Google parent company, Alphabet, owns YouTube and YouTube Gaming, which is Twitch's main competitor. Like Twitch, YouTube Gaming allows users to stream themselves playing games for fun or competition.

YouTube ad revenue only accounted for 13.66% of Google's revenue in 2024, and it's safe to say that just a small fraction of that came from YouTube Gaming. But if you think Google's overall business is solid, buying shares could offer you exposure to its livestream gaming platform.

3. Tencent Holdings

Tencent Holdings (OTC:TCEHY) is a Chinese internet and entertainment company whose services are used by more than 1 billion people worldwide. It makes some of the most popular video games on the planet. It's also the owner of Trovo, a livestreaming video platform similar to Twitch.

How to buy stocks similar to Twitch

Here's a step-by-step guide to buying stocks.

1. Open your brokerage account: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

ETFs with exposure to Twitch

Since Twitch is owned by Amazon, the only way to get Twitch exposure through exchange-traded funds (ETFs) is to invest in a fund that includes Amazon in its holdings. However, you can find ETFs that focus on gaming, streaming, and communications. Here are two ETFs that let you capitalize on these themes.

• Amplify Video Game Tech ETF (GAMR -0.21%): Founded in 2016, the GAMR ETF is the first ETF to directly focus on video gaming. Its 21 holdings include game developers, console and chip manufacturers and game retailers. The fund has a 0.59% expense ratio, which translates to $5.90 in fees on a $1,000 investment.
• Vanguard Communications Services ETF (VOX -0.35%): The VOX ETF takes a much broader focus than the first two ETFs listed, investing in 121 companies involved in data transmission, cellular and wireless communications, and companies that provide various types of content. The fund has a 0.09% expense ratio, which amounts to less than $1 in fees on a $1,000 investment.

Should you invest in gaming stocks?

If you're interested in similar gaming stocks, here's when you might want to invest vs. when you should probably steer clear.

Consider investing in video game or streaming stocks if:

• You believe that customer preferences will continue to shift away from traditional TV toward streaming services and user-generated content.
• You believe gaming and streaming services have room to grow, especially in emerging markets.
• You want to invest in businesses that can capitalize on the growing spending power of Gen Z.
• You believe new technologies like artificial intelligence (AI), augmented reality, and virtual reality can improve the gaming experience.
• You want to invest in businesses with a recurring revenue model.

You may want to avoid these stocks if:

• You already have a tech-heavy portfolio.
• You're looking for dividend income.
• You're worried about the impact of inflation or a potential recession on consumer discretionary spending.
• You believe government regulations targeted at issues like data privacy and smartphone/social media usage among teens could put pressure on gaming and streaming platforms.
• You believe that subscriber growth for gaming and streaming services has plateaued.

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