Notes

Roblox Goes Public and is Instantly Worth more than $45 Billion

Roblox posted revenue of nearly $925 million in 2018, up 82% from 2019. The company also announced in the last month that it now expects sales to increase by another 60% this year, bringing it to a a range of $1.44 billion to $1.52 billion.



There is no sign of slowing down for IPOs or SPACs



Roblox had 32.6 million daily active users at the end of 2020, and the company predicts that it will have 34.6 million to 36.4 million users by the end of 2021.



The majority of the players are youngsters 13 and under. Baszucki has stated that the company is advancing towards an age where the majority of its players aren't tweens anymore. Baszucki stated that the Roblox user base is growing rapidly, especially among 17-24-year-olds.



But Roblox noted in its paperwork with the Securities and Exchange Commission that having an extremely small user base will lead to greater scrutiny of the platform.



Roblox stated that consumers are increasingly turning to interactive entertainment options like ours, even younger ones and could require stricter consumer protection laws and regulations which could impose additional costs for companies like ours.



That means that Roblox has to make sure the game remains safe for children playing it and that privacy rules are strictly enforced. Stockalicious Roblox also has security measures in place to ensure that users of a younger age don't spend too much on Robux.



Baszucki expressed excitement about the stock market debut and added that it's ideal for long-term investors as well as employees of Roblox which was founded in 2004, to share in the financial success of the company's success.



Roblox listed shares on the New York Stock Exchange directly instead of issuing stock in an initial public offer. The stock was subject to an indicative price of $45 per share from the NYSE.



Spotify (SPOT), Slack(WORK) (which is currently being purchased by Salesforce (CRM), and Palantir were all listed on the public market via direct listings.



"A direct listing seemed natural to us. It brings the entire community together and everyone is using the same price at the start of trading," Baszucki said.



How Roblox became the most popular game for tweens -- and a huge business



What's next for the company after it's been publicly traded?



Roblox is still not profitable. It lost more than $253 million in 2020, which is up from a loss of $71 million the year before.



Baszucki stated that the company will look at increasing sales through advertising. He stressed that it will be organic. Users, for instance, can pay to wear Nike shoes in the game, as instead of seeing huge Air Jordan billboards in Roblox.



Baszucki said to CNN Business that the small amount of advertising they've done is authentic and immersive.



Baszucki, who uses Roblox under the name builderman, stated that he's not worried about Roblox becoming a trend and losing its popularity.



He also said that the game continues to gain players even though gamers have other options such as Minecraft, Fortnite and the increasingly popular Among Us to play during their free time.



Roblox is one of an increasing number of "unicorn" companies that have gone public over the last few months. This includes Poshmark and Airbnb, as well as Bumble and Poshmark. Gaming software firm Unity also went public in September and its shares have nearly doubled since then.



More market debuts for stocks are expected to follow later in the year, too with Instacart, Coinbase and Robinhood among the most anticipating new listings.


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