Roblox has delayed its public listing for early next year explaining the massive IPO rush has made it difficult to determine the right price for its shares.
Roblox Corporation, the popular US-based gaming platform has delayed its planned Initial Public Offering (IPO) to next year. The gaming company noted that it is currently working on improving its proposal to benefit investors and employees. In a memo to employees access by Reuters, Roblox Chief Executive David Baszucki wrote:
“We’ve seen companies take innovative approaches to creating a more market-based relationship between investors and companies. We’ve decided to take this opportunity to work with our advisers to see how we can make such improvements.”
The US IPO market is currently very hot as several companies raised huge money even during the pandemic of 2020. The recent blockbuster listing for Airbnb and DoorDash clearly hint at the same. Roblox noted that these two listings made it difficult for the company to determine the right price for its shares.
Riding on this IPO-wave, Roblox was planning to raise $1 billion through its listing on the New York Stock Exchange. Although most of the plan remains the same, the public listing will not happen in early 2021. The Roblox CEO also stated:
“Based on everything we have learned to date, we feel there is an opportunity to improve our specific process for employees, shareholders and future investors both big and small”.
Earlier this year, Roblox also floated the idea of a direct listing. however, it later decided to take the IPO route.
Roblox Ahead of IPO
With the COVID-19 lockdown, Roblox said that it has seen an increased customer base during this period. However, the company has been in confusion with respect to its valuations. Earlier, the company had maintained confidentiality in the filing submitted to the SEC. The current valuations for Roblox stand at around $4 billion.
Roblox registered an impressive revenue of $588.7 million during the first three quarters of 2020. The company’s revenue grew by an impressive 68%. Moreover, by September 2020, the daily active users on Roblox surged to 31.1 million, a whopping 82% surge from the last year of 2019.
Raising $1 billion from the market will help Roblox to quickly expand its operations and services in a short time. It will be interesting to watch further developments in this space.
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