Roblox is expected to be one of the hottest IPOs of 2021, so here’s everything that investors need to know.
Roblox is an online game platform that allows users to both play and create games accessible to the Roblox community. The company has been privately valued at almost $30 billion following a $520 fundraising round and filed for its IPO in November of 2020, with expectations to raise $1 billion in funding and open with an $8 billion valuation.
When can I buy Roblox stock?
Roblox will go public via direct listing on the NYSE on March 10, 2021.
What is Roblox’s IPO Price?
Roblox is expected to go public at $45 per share under the ticker symbol, RBLX.
Roblox’s Financials
Roblox had an extraordinary 2020, with revenues soaring to $588.7 million in the first three quarters of the year, a 68% increase over the same period in 2019. The increase in revenue has widened losses though, with the company’s S-1 reporting net losses of $203 million in the first 9 months of 2020, up from $46 million in the previous period. The company’s bookings have seen consistent growth of 62% in 2018, 39% in 2019, and 171% to $1.24 billion in the first three quarters of 2020. This ‘bookings’ figure is real money that has been converted into Robux, the platform’s virtual currency, but this figure cannot be accounted for as revenue until it is spent in-game.
Roblox has 36 million daily active users, up from 2019’s figure of 17.7 million. The pandemic indeed accelerated the company’s revenue and user growth in 2020, but Roblox’s revenue was still growing at an impressive rate of 39% pre-pandemic. Roblox is a source of entertainment for millions of people, but the company is also enabling creators to make money. The Roblox developer and creator pool earned $72.2 million in the first three-quarters of 2019 and $209.2 million in the same period in 2020.
Growth Potential
The growth potential for Roblox is huge. It has the ability to keep up with changing consumer tastes thanks to Roblox Studio, where people can create their own games. This is good news for the company, as users can always find new and interesting games without Roblox taking the financial risk of developing a brand new product from scratch, but when players purchase items within these games, Roblox gets a cut.
Roblox has only begun its expansion into the saturated Chinese market, which poses a major challenge for the business, but I’m confident we will see some traction here in the next ten years. User-generated gaming content hasn’t taken off in the region yet, but Roblox is hoping to change that, despite friction between the U.S. and China.
Roblox provides amazing entertainment and captivation to its users compared to other gaming companies. The platform has held online concerts featuring performers like Lil Nas X, in which 33 million people virtually attended. While parents have expressed concern over the addictiveness of the platform, and the company even mentioned this in its’ S-1 filing, nonetheless, I think Roblox will come out on top thanks to its impressive community, a mix of creators and players, and constant innovation.
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