Notes

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

Roblox's revenue was $925 million in 2018, which is an 82% increase over 2019. The company also announced earlier this month that it expects sales to increase by another 60% this year, bringing it to a the range of $1.44 billion to $1.52 billion.



There is no slowdown in sight for SPACs or IPOs



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



The majority of the company's players are kids 13 and under. Baszucki said that the company is nearing a point where the majority of its users are not tweens. He said the group of 17-24-year-old Roblox users is growing rapidly.



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



Roblox has stated that people are increasingly turning to interactive entertainment options like ours, and even younger ones and could call for 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. Roblox also has safeguards in place to ensure that children aren't spending too much to purchase Robux.



Baszucki revealed that he was excited about the launch of the stock market, and added that it was ideal for long-term investors and employees in Roblox.



Roblox listed shares on the New York Stock Exchange directly rather than 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 on the verge of being bought by Salesforce (CRM)) and Palantir all went public via direct listings too.



"A direct listing seemed natural to us. It brings everyone together and everyone uses 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 now that it's publicly traded?



Roblox isn't yet profitable. It lost more than $253 million in 2020, up from a loss or about $71 million the year before.
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Baszucki said the company will look to increase sales through advertising. He stressed that it should be organic. For instance, players can pay to get Nike shoes in the game, in contrast to billboards with large sizes for Air Jordan in Roblox.



Baszucki told CNN Business that the small amount of advertising they have done is authentic and immersive.



Baszucki, who's own Roblox user name is builderman, added that he's not overly worried about Roblox being a trend that could eventually suffer the loss of its popularity.



He noted that the game has continued 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.



Roblox joins a growing number of "unicorn" companies which have gone public in the past few months. This includes Poshmark and Airbnb and Bumble, as well as Bumble and Poshmark. Gaming software company Unity also went public last September and its shares have nearly doubled since then.



More debuts on the stock market are expected later this year, as well, with Instacart, Coinbase and Robinhood among the most anticipated new listings.


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