Topline
Shares of Gen-Z favorite Roblox skyrocketed 52% within minutes of the online gaming platform’s long-awaited public-market debut, propelling the firm’s market capitalization to nearly 50% more than its last private market valuation in January.
Roblox CEO David Baszucki, who goes by the username builderman, photographed for Forbes in August … [+]
Key Facts
Listed on the New York Stock Exchange under the ticker RBLX, shares started trading at about 1:30 p.m. EST and nearly immediately surged to a price of more than $68 from a reference price of $45 set on Tuesday.
The booming stock price boosted the firm’s market capitalization to roughly $44.3 billion–compared to a $29.5 billion valuation after its last private funding round in January.
San Mateo, Calif.-based Roblox was originally planning an initial public offering last year, but frothy market conditions led it to opt for a direct listing, which doesn’t issue new shares and instead lets existing shareholders sell part of their stakes; Roblox said it listed about 199 million shares Wednesday, out of 652 million outstanding.
Founded by billionaire CEO David Baszucki in 2004, the Roblox platform allows users to design and build out their own online games and gives creators a share of the revenue generated by their games (players can buy digital trinkets like avatars and other items).
The company’s revenue skyrocketed 82% last year, hitting $923.9 million amid pandemic-fueled growth, but its net losses also sharpened, totaling $257.7 million in 2020, compared to a loss of $71 million in 2019.
The broader market also pushed higher Wednesday after a weeks-long losing streak for technology stocks: At the time of Roblox’s debut, the S&P 500 and the Dow Jones Industrial Average were up about 0.7% and 1.2%, respectively.
Crucial Quote
“In 2004, we founded Roblox with the vision of connecting the world. Today, as we celebrate our direct listing on the [New York Stock Exchange], we recognize the potential ahead of us: to build the platform where billions of people come together to learn, work and play,” Baszucki tweeted Wednesday morning.
Key Background
Roblox was expected to go public via an initial public offering at the end of last year, joining the likes of Airbnb, DoorDash and billionaire Tom Siebel’s C3.ai in a string of year-end public-market debuts that marked the biggest December for IPOs on record. But the firm walked back the plans, citing concerns over an increasingly frothy market that made it difficult to set an offering price. Instead, it decided to go public with a direct listing in February, but those plans were also delayed after the Securities and Exchange Commission scrutinized the company’s revenue accounting.
Tangent
Despite the new public-market liquidity, Roblox isn’t expecting as strong a year compared with 2020. “We headed into 2020 with strong organic growth which was further bolstered by social distancing restrictions,” Chief Financial Officer Michael Guthrie said in a statement earlier this month. “As those restrictions ease, we expect the rates of growth in 2021 will be well below the rates in 2020, however, we believe we will see absolute growth in most of our core metrics for the full year.”
Big Number
36.4 million. That’s how many daily active users the firm expects to have by the end of this year, nearly 12% more than at the end of 2020. The company says two-thirds of children in the U.S. between the ages of 9 to 12 use its platform.
Further Reading
How Roblox Is Training The Next Generation Of Gaming Entrepreneurs (Forbes)
Newly Christened Billionaire David Baszucki’s ‘Addictive’ Roblox Is Equal To YouTube Among Gen-Z (Forbes)
Dow Jumps 300 Points After Positive Inflation Data–But The Risk Is Far From Over (Forbes)
Airbnb, DoorDash And Billionaire Tom Siebel’s C3.ai Are Upsizing Their Public Market Debuts, Revving Up Biggest December For IPOs Ever (Forbes)
