Roblox spikes 16% in public trading debut after $44 billion direct listing

The popular Roblox game, ‘Jailbreak.’ Roblox Image/JailBreak

Shares of Roblox spiked as much as 16% on Wednesday in the online gaming company’s first day of public trading. Shares began trading at $US64.50 ($84), hitting an intraday high of $US74.83 ($97).

The opening trades give the San Mateo, California-based firm a valuation of $US44 ($57) billion.

Roblox was valued at just $US4 ($5) billion back in February 2020 when the venture capital firm Andreessen Horowitz led a $US150 ($195) million funding round for the company. Then, in January, Roblox raised around $US520 ($675) million in a Series H private fundraising round that valued the fully diluted business at $US29.5 ($38) billion.

Roblox has seen an increased interest in its online gaming creation platform due to the pandemic which made 2020 a banner year for the firm.

According to the Roblox’s S1 Prospectus, the company boasts 32.6 million active users and earned $US923.9 ($1,199) million in revenue during 2020.

Roblox did incur a $US253 ($328) million net loss on the year, but the company continues to produce significant cash flows, posting $US411 ($533) million of free cash flow in 2020.

Roblox also continues to focus on paying its developers. In 2020, $US328.7 ($426) million went to Roblox developers via the platforms digital currency, Robux, which can be converted to cash.

Over 1,250 developers earned at least $US10,000 ($12,975) in the digital currency Robux from the platform and over 300 earned $US100,000 ($129,751) or more.

David Baszucki, Roblox’s founder and CEO, spoke with CNBC on Tuesday about the company’s public debut.

The CEO said he believes the growth at his company “will continue even after COVID” because of the community of gamers and developers that they’ve been able to create.

When asked what investors should be looking for as a “fair comp” for Roblox, Baszucki said he believes Roblox is “forging of a new category” and said it could be called something like a “future metaverse category.”

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