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.

IPOs this week : Feb 1 - 5, 2021 (wk 5)

IPOs expected to price 

• Telus International CDA (TIXT), 
• ON24 (NYSE:ONTF), 
• LoanDepot (LDI), 
• Atotech (ATC) and 
• Evaxion Biotech (EVAX). 

Across the Atlantic, Dr. Martens will start week two of trading after a successful first day in London. 

IPO lockup expirations

• Rackspace Technology (NASDAQ:RXT), BigCommerce (NASDAQ:BIGC) and CNS Pharma (NASDAQ:CNSP) on February 2, 
• Freeline Therapeutics (NASDAQ:FRLN), Ibex Holdings (NASDAQ:IBEX), Checkmate Pharmaceuticals (NASDAQ:CMPI) and Olb Group (NASDAQ:OLB) on February 3. 

IPO quiet period expirations

• Cullinan (NASDAQ:CGEM) and Gracell Bio (NASDAQ:GRCL) on February 3 

One of the most anticipated IPO debuts of the year was pushed back when Roblox postponed its offering after recently raising private funding at a $29.5B valuation.

Roblox postpones its IPO until next year

 

The company’s co-founder and chief executive, David Baszucki, announced the decision in a memo to employees on Friday, saying that waiting provided “an opportunity to improve our specific process for employees, shareholders and future investors both big and small.”

DoorDash, the country’s largest food-delivery company, started trading Wednesday with an I.P.O. price of $102, but ended the day up 86 percent, closing at $189.51 per share. The next day, Airbnb, a home rental company, rose 113 percent on its first day of trading, from $68 to $144.71 per share.

Roblox has exploded in popularity since the beginning of the pandemic, especially among children. In an offering prospectus last month, it said it averaged 31.1 million daily active users in the first nine months of 2020, up 82 percent from a year earlier, but had lost $203 million in the same period. Inside the Roblox online universe, players’ avatars can interact and play millions of unique games set in different worlds, from tropical islands to haunted castles. Players pay money for premium memberships, as well as for items and clothing for their avatars.

David Baszucki, the co-founder and CEO of Roblox

Even so, the company lost money. Its net loss totaled $203 million in the first nine months of 2020, more than four times the $46 million it lost in the same period a year ago. Roblox also warned that it was unlikely to experience the same growth when the pandemic subsides, warning that the surge was “almost certainly not indicative of our financial and operating results in future periods.”

In a letter in the prospectus, David Baszucki, a Roblox founder and now its chief executive, wrote, “Our original vision to make Roblox a platform for shared experiences is now leading the way for a new category we call human co-experience.” He added, “Our vision for the future of our platform has never been more real and attainable.”

In total, 41 tech companies have gone public in the United States so far this year, raising $17.7 billion, according to Renaissance Capital.

IPOs this week : November 16 - 20, 20 (wk 47)

 IPOs expected to price

• Aspire Real Estate Investors (ASPI)
• NeoGames (NGMS), 
• Telos (TLS), 
• Sotera Health (SHC) and 
• Maravai LifeSciences (MRVI) 

Maravi appears to be the largest of the bunch, with the biotech looking to raise $1.275B. There is also some speculation that e-retailer Wish and kids gaming company Roblox (RBLX) could file for an IPO next week to follow on DoorDash's (DASH) filing from Friday. 

IPO quiet period expirations

• Guild Holdings (NYSE:GHLD), McAfee (NASDAQ:MCFE) and Datto (NYSE:MSP) on November 16. 

IPO lockup expirations

• Chewy (NYSE:CHWY) and 89bio (NASDAQ:ETNB) on November 16, 
• Avantor (NYSE:AVTR), Futu Holdings (NASDAQ:FUTU) and SelectQuote (NYSE:SLQT) on November 17.

IPOs this week : Nov 9 - 13, 20 (wk 46)

IPOs expected to price

• Aspire Real Estate Investors (ASPI), NeoGames (NASDAQ:NGMS), Telos (NASDAQ:TLS), Sotera Health (NASDAQ:SHC) and Maravai LifeSciences (NASDAQ:MRVI) are all expected to price their IPOs next week. 

Maravi appears to be the largest of the bunch, with the biotech looking to raise $1.275B. 

There is also some speculation that e-retailer Wish and kids gaming company Roblox (RBLX) could file for an IPO this week to follow on DoorDash's (DASH) filing from Friday. 

IPO quiet period expirations

• Guild Holdings (NYSE:GHLD), McAfee (NASDAQ:MCFE) and Datto (NYSE:MSP) on November 16.   

IPO lockup expirations

• Chewy (NYSE:CHWY) and 89bio (NASDAQ:ETNB) on November 16, as well as 
• Avantor (NYSE:AVTR), Futu Holdings (NASDAQ:FUTU) and SelectQuote (NYSE:SLQT) on November 17.

Roblox plans an IPO

• Roblox makes freemium games supported with in-app purchases and operates Roblox Studio, a free game creation system that puts the company in competition with recently listed Unity Software (NYSE:U).

• Gaming company announces confidential filing with SEC after revealing earlier this year that it had more than 150 million active users

Youth-focused gaming company Roblox Corp. announced Monday that it is in the process of going public.

The company disclosed in a release Monday morning that it has submitted confidential paperwork with the Securities and Exchange Commission pertaining to a potential initial public offering. Roblox hosts child-friendly games focused on digital characters resembling Lego, and has increased in popularity during the COVID-19 pandemic like many other videogames.

Roblox announced in July that it had more than 150 million monthly active users on its platform, which topped the latest numbers from a similar game, “Minecraft.” Microsoft Corp.’s (MSFT) Xbox division announced in May that 126 million people were playing that title each month.

Roblox also offers tools for developers and said in July that its developer community was on pace to earn $250 million in 2020, up from $110 million in 2019.

Games on the Roblox platform include “Adopt Me!,” a virtual-pet title that had over 10 billion plays as of late July, and “Piggy,” which launched in January and had nearly 5 billion visits in just over six months from its launch date.