Roblox Corporation trading of its Class A common stock on the New York Stock Exchange commenced under the symbol “RBLX” yesterday and the company’s shares, which opened trading at $64.50 apiece, closed at $69.50 in New York, giving Roblox a market value of more than $38 billion. The company’s fully diluted valuation, including restricted stock units and employee options, is about $45 billion, making it one of the most valuable companies to go public during the pandemic.
“The game industry’s swimming in cash. It’s just raining money on these people, on these companies,” said a New York University professor who studies the business of video games Joost van Dreunen as per NY Times.
Roblox’s performance was another sign of an increasingly hot public offering market. When Airbnb and DoorDash went public last year, their share prices immediately soared, raising questions about whether there was a new stock market bubble. The investor demand for fast-growing young companies has been so off the charts that Roblox decided in December to delay its listing because it was too difficult to price its shares accurately.
Based on a fully diluted share count of 652 million, which includes restricted stock units that will convert to common stock, the company was worth $45.3 billion, as of its closing price.
Roblox hits the market with an explosive year of growth, primarily from kids who were stuck at home because Covid-19 forced schools to close and sports leagues to shut down. Within Roblox, which is one of the top-grossing apps on Apple and Google devices, users create avatars that they can move between the millions of games on the service, navigating theme parks, adopting virtual pets and fighting enemies with their friends.
As per CNBC, revenue last year jumped 82 per cent to $923.9 million. Still, Roblox’s net loss widened to $253.3 million from $71 million in 2019 as the company almost tripled the amount of money it paid to developers through its revenue sharing program. More than 1,250 developers made at least $10,000 last year through virtual sales in their Roblox games.