Notes

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

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



There is no sign of a slowdown in sight for SPACs and IPOs



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



The majority of the company's players are kids 13 and under. Baszucki said that the company is nearing a point where many of its players will not be tweens. Baszucki said that the Roblox user base is growing rapidly among 17-24-year-olds.



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



Roblox said that its users are increasingly turning to interactive entertainment services 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 must ensure that the game is safe for minors and that privacy policies are strictly enforced. Roblox also has safeguards in place to make sure that users of a younger age don't overspend on Robux.



Baszucki stated that he was excited about the debut of the stock market, and added that it would be beneficial 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 offering. The NYSE had set a reference price of $45 per share for the stock.



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



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



Roblox How it became the "it" game for teens -- and also a massive 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, an increase from a loss or about $71 million the year before.



Baszucki stated that the business is looking to increase sales through advertising. He added that it will be organic. For example, users can pay for Nike shoes in the game, as opposed to billboards with large sizes for Air Jordan in Roblox.



"The little amount of advertising we have been doing has been authentic and immersive," Baszucki told CNN Business.



Baszucki, who's own Roblox user name is builderman. iqbalir He also said that he's not worried about Roblox being a trend that will eventually suffer from the loss of its popularity.



He also said that the game continues 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 down time.



Roblox is now part of a growing list of so-called unicorn companies which have gone public in the past few months and have soared like Bumble, Poshmark, Airbnb and DoorDash. Unity is a gaming software company, was listed in September of last year. Its stock has nearly doubled in that time.



Instacart and Coinbase are among the most anticipated stock market debuts this year. Robinhood is also expected to debut later in the year.


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