Notes

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

Roblox's revenue was nearly $925 million in 2018, an 82% more than the revenue in 2019. The company also said earlier this month that it now expects sales to grow by an additional 60% this year to the range of $1.44 billion to $1.52 billion.
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There is no slowdown in sight for SPACs or IPOs



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



The majority of the company's players are kids 13 and under. Baszucki said that the company is nearing an age where the majority of its users will not be tweens. He said the group of 17-24 year old Roblox users is growing very quickly.



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 turning to interactive entertainment offerings such as ours, and even younger ones, and may call for stricter consumer protection laws and regulations, which could result in higher expenses on companies such as ours.



Roblox must ensure that the game is safe for children and that privacy policies are strictly adhered to. The company also has safeguards in place to ensure that young users don't spend too much money to buy Robux.



Baszucki said he was thrilled about the debut of the stock market, and added that it was beneficial for long-term investors and employees of 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 price reference of $45 a share for the stock.



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



"For us the direct listing was natural. Baszucki stated that direct listing brings together the entire community and everyone pays the same price for trading at the opening.



How Roblox became the most popular game for teens -- and a huge business



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



Roblox isn't yet profitable. It lost more than $253 million in 2020, which is up from a loss or about $71 million the year before.



Baszucki stated that the business is looking to increase sales through advertising. He said it will be organic. For instance, players can pay to get Nike shoes in the game, in contrast to large billboards for Air Jordan in Roblox.



"The small amounts of advertising we've been putting out is immersive and authentic," Baszucki told CNN Business.



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



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



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



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


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