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Roblox toys are on display at a toy fair in London.
Leon Neal / Getty Images
The New York Stock Exchange said late Tuesday that the reference price for Roblox, which will be published tomorrow, is $ 45 per share.
With approximately 652 million shares outstanding, the reference price indicates that Roblox’s market capitalization could reach $ 29.3 billion.
Roblox will trade on the NYSE on Wednesday under the symbol RBLX. About 199 million Roblox shares will enter the market, but unlike a traditional IPO, the company does not raise new capital through supply. Instead, the holders will sell shares they already own.
The reference price of $ 45 does not mean that Roblox shares will start trading there. Rather, it is meant to be a guide that informs the public about recent private business activity, according to a person familiar with the situation.
Direct listings are not new, but they have gained attention lately. Roblox will be the fifth company to go public using this method.
Palantir Technologies (ticker: PLTR), Asana (ASAN), Slack Technologies (WORK) and Spotify Technology (SPOT) all used direct listings to make their debut on the public capital market. Companies typically do not raise capital through direct listings, although in December the Securities and Exchange Commission approved an amendment to the NYSE’s proposed rule that allows a company to do so.
Roblox will not receive any proceeds from shareholders selling their shares.
Goldman Sachs,
Morgan Stanley,
and
Bank of America
I advise Roblox about the deal.
When Spotify went public on the NYSE in 2018, its benchmark was the level of the latest private secondary transactions. In Slack’s 2019 listing, the benchmark was carefully informed of the volume-weighted average price of recent secondary trading activity, but it was not the exact average, the person said.
Unlike the price range set by traditional IPO subscribers – usually a reasonable indicator of the offer price – the reference price is not particularly useful as an indicator of where a directly listed stock will trade.
Both Palantir and Asana went public in September using direct listings. Palantir’s reference price was $ 7.25, but the stock opened at $ 10 on September 30, reached a high of $ 11.42 and closed at $ 9.50. While Asana’s reference price was $ 21, it opened at $ 27, peaked at $ 29.96 and ended at $ 28.80.
Founded in 2004, Roblox hosts child-friendly games focused on Lego block-like digital characters. On average, 37.1 million people come to Roblox every day to play games.
Roblox is not profitable. Losses expanded to $ 253.3 million by 2020, compared to $ 71 million in 2019. Revenues increased nearly 82% to $ 923.9 million. David Baszucki, co-founder, president and CEO of Roblox, holds 70.1% of the total voting power, the prospectus shows.
Write to Luisa Beltran at [email protected]