Roblox has postponed its initial public offering and has set a date for its direct listing.
According to a revised prospectus filed on Monday, the video game company is now “will be listed on or about March 10.” Roblox sought to sell 198,917,280 shares, but did not specify a price. In January of this year, the company sold nearly 12 million convertible preferred shares through a private placement at a price of $45 per share. Renaissance Capital (Renaissance Capital) said that listing at this price will make the company’s valuation more than 29 billion US dollars. Roblox said in its prospectus that the opening price of approximately 199 million shares will be “determined by buy and sell orders collected by the New York Stock Exchange from broker-dealers.”
Roblox will become the fifth company to be listed directly. When Palantir Technologies (PLTR), Asana (ASAN), Slack Technologies (WORK) and Spotify Technology (SPOT) IPOs, they all use direct listings.
Roblox will be listed on the New York Stock Exchange under the ticker symbol RBLX. Goldman Sachs, Morgan Stanley and Bank of America are acting as financial advisors for the transaction.
Roblox was established in 2004 to provide children’s games, focusing on digital characters similar to Lego bricks. An average of 37.1 million people come to Roblox to play games every day.
The company has no profits. For the year ended December 31, the loss widened to $253.3 million, compared with a loss of $71 million in the same period in 2019. Revenue on December 31 increased by nearly 82% to $923.9 million. It has 960 full-time employees. The prospectus says that Roblox’s co-founder, president and CEO David Baszucki owns 70.1% of the total voting rights.
Roblox’s road to direct listing has not been smooth sailing. In November, the company initially applied for a public listing through a traditional initial public offering.Then, after its strong debut in December, it delayed the release
(DASH) makes it too difficult to determine the correct stock price.
In January, Roblox changed its thinking on traditional IPOs and chose to conduct a public offering through a direct listing.
Roblox made this change after the US Securities and Exchange Commission approved a rule change on the New York Stock Exchange, which allowed a direct listing on the floor in December. Now, companies that use the direct listing on the floor can sell new shares and raise new funds directly on the exchange through a large transaction without an underwriter.
Direct listing aims to provide investors with a level playing field. Pricing is determined by orders received by the exchange. For example, a designated market maker will determine Roblox’s open public price based on buy and sell orders collected by the New York Stock Exchange from broker dealers. The market maker will negotiate with the financial advisers of Goldman Sachs, Morgan and Bank of America to determine the opening price of Roblox.
This is different from traditional IPOs, which are set by the underwriters to issue prices. On the first day of the transaction, this sometimes leads to a pandemic.
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