Roblox expects direct listing on the NYSE in February

Roblox said in an updated prospectus on Friday that it intends to make it public through a direct list next month, after the online gaming company delayed its debut in December.

Earlier this week, Roblox revealed that it had raised $ 520 million in a round of private funding before a direct listing. Taking this route to public markets instead of a traditional IPO, Roblox tracks Spotify, Slack, Palantir and Asana, bypassing the sale of shares and instead allowing stakeholders and employees to sell shares to new investors immediately.

The latest round of financing, at $ 45 per share, valued Roblox at $ 29.5 billion. In the updated document, Roblox said an independent valuation report in December places the shares at $ 41.52 a piece. By raising money before it went public, Roblox managed to keep its balance sheet and maintain its ability to bring in more capital through a secondary sale at the end of this year.

In the direct listing, the NYSE will set a reference price for the stock one night before Roblox’s debut, but no shares will be traded at that price. In the morning, market makers will agree with buyers and sellers to determine the opening price, and the stock will be available for the wider market, under the symbol “RBLX”.

Roblox had thought of a more traditional public offering, but unveiled its plans last month after DoorDash and Airbnb appeared on consecutive days, prompting concern that the company risk leaving too much money on the table.

“Due to market volatility and the performance of other recently subscribed initial public offerings, we have chosen to submit this prospectus as an amendment to the registration statement and follow a direct listing to allow the public opening price of our Class A common shares on the NYSE buying and selling orders collected by the NYSE from brokers-dealers, “Roblox said in the prospectus.

Because it does not make an IPO, Roblox no longer requires subscribers. The company said Goldman Sachs and Morgan Stanley will remain as financial advisors, but JPMorgan, Bank of America and RBC Capital Markets have been eliminated.

Roblox, which first launched in 2006, entered the public market after a year of dramatic childhood growth, who were forced to stay home during the pandemic, spent more time playing games.

Third-quarter revenue increased 91% from a year earlier to $ 242.2 million. Daily active users almost doubled to 36.2 million in September, and “hours worked” doubled to 8.7 billion.

In the Roblox app, users create an avatar that they can move between millions of different games. Everyone is free to play, but users buy a virtual coin called Robux for advanced features or to build their character.

The games are created by external developers, who share the revenue with Roblox. The company said in the updated file that in the first three quarters of 2020, the platform had about 3,800 developers, who earned 215 million dollars. That was up from a year earlier, when 2,400 developers earned $ 72.2 million.

While many game creators cash in on real money, “some choose to reinvest their Robux in developer tools, promote their experiences through our internal advertising network, or spend Robux as any other user would.” said the company.

– CNIE’s Leslie Picker contributed to this report.

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