Roblox goes public and is worth more than $ 45 billion

Roblox describes itself as a “metaverse” where players can create their own avatars and environments to play in, such as virtual theme parks or scuba diving.

Roblox can be downloaded for free on phones, tablets and consoles. The company generates almost all of its revenue from the sale of its Robux coin, which can be used to buy virtual items within the game. More than half of these sales are made through app stores apple (AAPL) i Google (GOOGL).

Last year, Roblox reported revenue of about $ 925 million, 82% more than in 2019. The company also said earlier this month that it now expects sales to increase 60% more this year. to a range of $ 1.444 billion to $ 1.52 million.

Roblox had 32.6 million daily active users by the end of 2020 and the company expects to have between 34.6 and 36.4 million by the end of 2021.

Most of the company’s players are under 13 years old. But Baszucki said the company is approaching a point where most of its players will not be tweens. He said the 17- to 24-year-old Roblox user group is growing very fast.

But Roblox noted in its documentation with the Securities and Exchange Commission that having such a young user base will lead to greater control of the platform.

“Increased use of interactive entertainment offerings such as ours by consumers, including younger consumers, may result in the application of stricter consumer protection laws and regulations that may impose additional charges. to companies like ours, ”Roblox said.

This means that Roblox must ensure that the game is kept safe for minors who play in it and that privacy practices are strictly enforced. The company also has guarantees to ensure that younger users do not spend too much when buying Robux.

Baszucki was excited about the stock market debut, adding that it is good that investors and long-term employees of Roblox, founded in 2004, are financially involved in the company’s success.

Roblox listed shares directly on the New York Stock Exchange, rather than issuing new shares on an initial public offering. The NYSE had set a reference price of $ 45 per share for the shares.

“To us, a direct quote seemed natural. It brings the whole community together and everyone uses the same price at the opening of the negotiation,” Baszucki said.

So what will be the future for the company now that it is listed on the stock exchange?

Roblox is not yet profitable. It lost more than $ 253 million in 2020, compared to a loss or about $ 71 million the previous year.

Baszucki said the company will seek to generate more sales from advertising. He stressed that it will be organic. Users, for example, can pay to wear Nike shoes to the game instead of seeing big billboards from Air Jordan at Roblox.

“The small amounts of advertising we’ve been doing are immersive and authentic,” Baszucki told CNN Business.

Baszucki, Roblox’s own username is builderman, added that he doesn’t worry too much that Roblox is a fad that will end up suffering a loss of popularity.

He noted that the game has continued to add users even as players have other options such as Minecraft, Fortnite and the increasingly popular Among Us to play during their free time.

More stock market debuts are also expected to take place later this year, with Instacart, Coinbase and Robinhood among the most anticipated new listings.