Notes

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

Roblox reported revenue of close to $925 million in 2018, up 82% from 2019. Roblox also announced earlier this month that sales are expected to rise by 60% from $1.44 billion to $0.52 billion.



There is no sign of a slowdown for IPOs or SPACs



Roblox was home to 32.6 Million Daily Active Users 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 players are kids 13 and under. However, Baszucki said Roblox is nearing an age where the majority of its players will not be tweens. Baszucki said that the Roblox user base is growing rapidly with 17-24-year-olds.



But Roblox stated in its filing with the Securities and Exchange Commission that having such a small user base will cause greater scrutiny of the platform.



Roblox has stated that people are increasingly using interactive entertainment offerings such as ours, even younger ones and could require stricter consumer protection laws and regulations, which could result in additional costs for companies like ours.
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Roblox must ensure that the game is safe for minors and that privacy policies are strictly adhered to. Roblox also has safeguards in place to ensure that younger users aren't spending too much to purchase Robux.



Baszucki said he was excited about the debut of the stock market, adding that it is good for longer-term investors and employees in Roblox founded in 2004, to take part financially in the company's success.



Roblox listed shares on the New York Stock Exchange directly instead of issuing stock in an initial public offering. The stock was subject to an initial price of $45 per share from the NYSE.



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



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



How Roblox became the 'it' game for teens -- and 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, as compared to an loss of $71 million in the previous year.



Baszucki stated that the business will seek to increase sales by advertising. He stressed that it should be organic. For example, users can pay to have Nike shoes in the game, as opposed to large billboards for Air Jordan in Roblox.



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



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



He said that the game has continued to gain players even though gamers have other options like Minecraft, Fortnite and the ever-growingly popular Among Us to play during their free time.



Roblox is now part of a growing list of so-called unicorn companies which have gone public in the past few months and soared, such as Bumble, Poshmark, Airbnb and DoorDash. Unity is a gaming software company, went public in September last year. Its stock has almost doubled in the span of a year.



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


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