Roblox expects direct listing on the NYSE in February

Roblox said Friday in an updated brochure that it plans to make it public through a direct listing next month, after the online gaming company delayed its debut in December.

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

The last round of funding, with $ 45 per share, valued Roblox at $ 29.5 billion. In the updated filing, Roblox said an independent valuation report in December put the shares at $ 41.52 per piece. By raising money before it went public, Roblox was able to amortize its balance sheet and preserve the ability to contribute more capital through a secondary sale later this year.

According to the direct listing, the NYSE will set a benchmark price for the shares the night before Roblox’s debut, but no shares will be listed at that price. In the morning, market makers will match buyers and sellers to determine the opening price and stocks will be available to the general market with the “RBLX” symbol.

Roblox had been considering a more traditional IPO, but unveiled its plans last month after DoorDash and Airbnb appeared on consecutive days, which worried the company would risk leaving too much money on the table.

“Due to market volatility and the performance of other initial public offerings recently subscribed, we have chosen to present this brochure as an amendment to the registration statement and pursue a direct quote to determine the public opening price of the our common shares of NYSE class A through purchases and sales of orders collected by NYSE to intermediaries, ”Roblox said in the brochure.

Because it does not go public, Roblox no longer needs subscribers. The company said Goldman Sachs and Morgan Stanley will continue to be financial advisors, but JPMorgan, Bank of America and RBC Capital Markets were withdrawn from filing.

Roblox, which launched its service in 2006, hits the public market after a year of dramatic growth as a child, who were forced to stay home during the pandemic and spent more time playing games.

Third-quarter revenue jumped 91% from the previous year to $ 242.2 million. Daily active users almost doubled during the period ending in September to 36.2 million and “dedicated hours” more than doubled to 8.7 billion.

In the Roblox app, users create an avatar that can move between millions of different games. All are free to play, but users buy virtual currency 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 presentation that in the first three quarters of 2020, the platform had about 3,800 developers, who earned $ 215 million. This happened a year earlier, when 2,400 developers earned $ 72.2 million.

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

– CNBC’s Leslie Picker contributed to this report.

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