Roblox expects a direct itemizing on the NYSE in February

David Baszucki, Roblox CEO

Roblox

Roblox said in an updated prospectus on Friday that it plans to go public via direct listing next month after the online game company postponed its December debut.

Earlier this week, Roblox announced it had raised $ 520 million in a private round of funding prior to a direct listing. On this path to the public markets instead of a traditional IPO, Roblox follows Spotify, Slack, Palantir and Asana, bypassing a stock sale and allowing existing stakeholders and employees to sell stocks to new investors immediately.

In its final round of funding, at $ 45 per share, Roblox was valued at $ 29.5 billion. In the updated filing, Roblox said an independent valuation report in December placed the shares at $ 41.52 apiece. Raising funds prior to going public helped Roblox replenish its balance sheet and maintain its ability to raise more capital through a second sale later that year.

As part of the direct listing, the NYSE will set a reference price for the stock the night before Roblox’s debut, but no stocks will trade at that price. In the morning, the market makers will bring together buyers and sellers to determine the opening price and the stock will be available to the broader market under the ticker symbol “RBLX”.

Roblox had been considering a more traditional IPO but filed its plans last month after DoorDash and Airbnb popped up on consecutive days, leading to concerns that the company was risking leaving too much money on the table.

“Due to market volatility and the performance of other recent IPOs, we have chosen to file this prospectus as an amendment to the registration statement and make a direct listing to enable the opening price of our Class A common shares to be determined on the NYSE through buy and sell orders, that was collected by the NYSE from broker-dealers, “Roblox said in the prospectus.

Since there is no IPO, Roblox no longer needs underwriters. The company said Goldman Sachs and Morgan Stanley would continue to serve as financial advisors, but JPMorgan, Bank of America and RBC Capital Markets were removed from filing.

Welcome to Bloxburg

Roblox

Roblox, which first released its service in 2006, is entering the public market after a year of dramatic growth as children forced to stay home during the pandemic spent more time playing games.

Third quarter revenue increased 91% year over year to $ 242.2 million. Daily active users nearly doubled to 36.2 million through September, and “busy hours” more than doubled to 8.7 billion.

In the Roblox app, users create an avatar that they can use to switch between millions of different games. They are all free to play, but users buy Robux virtual currency to use advanced features or develop their characters.

The games are created by outside developers who share the revenue with Roblox. In the updated filing, the company said the platform had approximately 3,800 developers in the first three quarters of 2020, making $ 215 million. That was the year before, when 2,400 developers made $ 72.2 million.

While many game developers cash out in real currency, “some choose to reinvest their Robux in developer tools, advertise their experience through our internal advertising network, or spend the Robux like any other user,” the company said.

– CNBC’s Leslie Picker contributed to this report.

CLOCK: Roblox IPO files and a theatrical twist?

Comments are closed.