Notes

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

Roblox's revenue was $925 million in 2018, an 82% growth over the year before. Roblox also said earlier in the month that sales are expected to grow by 60%, from $1.44 billion to $0.52 billion.



There is no sign of slowing down for IPOs or SPACs



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



The majority of the company's players are children 13 and under. Chakribakri's Blog Baszucki has stated that the company is nearing the point at which many of its players will not be tweens. Baszucki noted that the Roblox user base is growing rapidly among 17-24-year-olds.



Roblox, however, noted in its paperwork with Securities and Exchange Commission that a young user base will lead to more scrutiny of the platform.



"The increased use of interactive entertainment offerings like ours by consumers including younger consumers, may result in calls for more rigorous consumer protection laws and regulations that may impose additional burdens on companies like ours." Roblox said.



Roblox has to ensure that the game is safe for minors and that privacy policies are strictly enforced. Roblox also has security measures in place to make sure that children don't spend too much on Robux.



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



Roblox listed shares directly on the New York Stock Exchange as instead of releasing new stock in an initial public offering. The NYSE had set a benchmark price of $45 per share for the stock.



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



"For us the direct listing was natural. It brings everyone together, and everyone is paying the same price at the start of trading," Baszucki said.



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



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



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



Baszucki said that the company will be looking to generate more sales from advertising. He said that it would be organic. For example, users can pay to have Nike shoes in the game, as opposed to billboards with large sizes for Air Jordan in Roblox.



Baszucki stated to CNN Business that the small amount of advertising they have done is authentic and engaging.



Baszucki, who plays Roblox under the name builderman, stated that he's not worried about Roblox becoming a trend or losing 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 increasingly popular Among Us to play during their free time.



Roblox joins a growing list of unicorn companies which have gone public in the past few months and soared, such as Bumble, Poshmark, Airbnb and DoorDash. Unity, a gaming software company, went public in September last year. Its stock has nearly doubled since then.



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


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