Roblox (RBLX) to go public through a direct listing around March 10

Roblox, which had delayed its initial public offering, has set a date for a direct listing of its shares.

The videogame company is now going public “on or about March 10,” according to an amended prospectus filed on Monday. Roblox is seeking to sell 198,917,280 shares, but has not specified a price. In January, the company sold nearly 12 million shares of convertible preferred stock in a private placement at $45 a share. Renaissance Capital said that a listing at that price would value the company at more than $29 billion. Roblox said in the prospectus that the opening price of the roughly 199 million shares would be “determined by buy and sell orders collected by the NYSE from broker-dealers.”

Roblox will be the fifth company to go public using a direct listing. Palantir Technologies (PLTR), Asana (ASAN), Slack Technologies (WORK), and Spotify Technology (SPOT) all used a direct listing when they made their public equity markets debuts.

Roblox will trade on the New York Stock Exchange under the ticker RBLX. Goldman Sachs, Morgan Stanley, and Bank of America are acting as financial advisers on the deal. 

Founded in 2004, Roblox hosts child-friendly games focused on digital characters resembling Lego blocks. An average of 37.1 million people come to Roblox daily to play games.

The company is not profitable. Losses widened to $253.3 million for the year ended Dec. 31, compared with $71 million in losses for the same period in 2019. Revenue rose nearly 82%, to $923.9 million, for the Dec. 31 period. It has 960 full-time employees. David Baszucki, Roblox co-founder, president and CEO, has 70.1% total voting power, the prospectus said. 

Roblox’s path to a direct listing wasn’t straightforward. In November, the company initially filed to go public using a traditional initial public offering. Then, in December, it delayed the offering after the strong debuts of Airbnb (ABNB) and DoorDash (DASH) made it too difficult to determine the right price for shares.

Roblox in January changed its mind about a traditional IPO, choosing to go public through a direct listing.

Roblox’s switch came after the Securities and Exchange Commission approved a rule change from the New York Stock Exchange that allowed direct floor listings in December. Companies that use direct floor listings can now sell new shares and raise fresh capital in a single large transaction directly on the exchange without underwriters. 

Direct listings aim to level the playing field for investors. The pricing is set by the orders received by the exchange. For example, a designated market maker will determine Roblox’s opening public price based on buy and sell orders the NYSE collects from broker-dealers. The market maker will decide Roblox’s opening price in consultation with its financial advisers, Goldman, Morgan, and BofA.