Notes

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

Roblox's revenue was nearly $925 million in 2018, which is an 82% more than the revenue in 2019. The company also said earlier this month that it now expects sales to rise about another 60% this year to an estimated range of $1.44 billion to $1.52 billion.



No slowdown in sight for IPOs or SPACs



Roblox was home to 32.6 Million Active Users Daily at the end of 2020. The company predicts that it will have 34.6 to 36.4 Million users by 2021.



The majority of the company's players are youngsters 13 and under. Baszucki stated that the company is getting close to a point where the majority of its players aren't tweens anymore. He said the group of 17-24 year old Roblox users is growing very quickly.



However, Roblox noted in its paperwork with the Securities and Exchange Commission that having such a younger user base could cause greater scrutiny of the platform.



"The increasing use of interactive entertainment like ours by consumers, especially younger ones, could result in calls for more rigorous consumer protection laws and regulations that may create additional burdens for companies like ours," Roblox said.



Roblox must ensure that the game is safe for minors and that privacy policies are strictly adhered to. The company also has safeguards in place to ensure that children aren't paying too much to purchase Robux.



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



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



Spotify (SPOT), Slack(WORK) (which is currently being purchased by Salesforce (CRM) and Palantir were all made public through direct listings.



"For us the direct listing was natural. Baszucki said that direct listing can bring together all the community and everyone is using the same price at the time of trading.



Roblox How it became the "it" game for teens -- and a huge business



What's the next step for the company now that it's publicly traded?



Roblox isn't yet profitable. It lost more than $253 million in 2020, compared to an loss of $71 million a previous year.



Baszucki stated that the business will seek to increase sales by advertising. He said it will be organic. Users, for example, can pay to wear Nike shoes in the game as opposed to seeing big Air Jordan billboards in Roblox.
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Baszucki stated to CNN Business that the small amount of advertising they have done is authentic and engaging.



Baszucki, whose personal Roblox user name is builderman, said that he's not too worried about Roblox being a trend that eventually suffers the loss of its popularity.



He also said that the game has continued to grow in popularity even as gamers have other options such as Minecraft, Fortnite and the ever-growingly popular Among Us to play during their free time.



Roblox is among a growing number of "unicorn" companies which have gone public in the past few months. These include Poshmark and Airbnb in addition to Bumble and Poshmark. Gaming software firm Unity was also listed in September and its stock has nearly doubled since then.



More market debuts for stocks are expected later this year, as well, with Instacart, Coinbase and Robinhood among the most eagerly anticipating new listings.


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