Notes

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

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



There isn't a slowdown in sight for SPACs and IPOs



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



The majority of the company's players are children 13 and under. However, Baszucki said Roblox is getting to a point where most of its users won't be tweens. He said the group of 17-24-year-old Roblox users is growing very quickly.



However, Roblox stated in its filing with the Securities and Exchange Commission that having this young user base will cause more scrutiny of the platform.



Roblox said that its users are increasingly turning to interactive entertainment options like ours, and even younger ones and could require stricter consumer protection laws and regulations which could result in higher costs on companies like ours.



Roblox has to ensure that the game is safe for children and that privacy policies are strictly enforced. The company also has safeguards to ensure that younger users don't spend too much money to buy Robux.



Baszucki stated that he was excited about the debut of the stock market and added that it was ideal for long-term investors and employees of Roblox.



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



Spotify (SPOT), Slack (WORK) (which is in the process of being acquired by Salesforce (CRM)) and Palantir all went public via direct listings too.



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



How Roblox became the 'it' game for tweens -- and also a huge business



So what's next for the company now that it is publicly traded?



Roblox is still not profitable. It lost more than $253 million in 2020, as compared to the loss of $71 million a previous year.



Baszucki said that the company will be looking to increase sales through advertising. He said it will be organic. For instance, players can pay for Nike shoes in Roblox, as opposed to large billboards for Air Jordan in Roblox.



"The little amount of advertising we've been putting out is authentic and immersive," Baszucki told CNN Business.



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



He said that the game continues to grow in popularity even as gamers have other choices like Minecraft, Fortnite and the ever-growingly popular Among Us to play during their free time.
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Roblox is among an increasing number of "unicorn" companies that have gone public in the past few months. This includes Poshmark and Airbnb in addition to Bumble and Poshmark. Unity is an online gaming company, went public in September last year. Its stock has almost doubled in the span of a year.



More debuts on the stock market are expected later this year, too, with Instacart, Coinbase and Robinhood among the most eagerly anticipating new listings.


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