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This would not be the first time Roblox is suspending its listing plan.
The Securities and Exchange Commission (SEC) of the United States has forced Roblox Corp’s hands into temporarily suspending its attempt to go public because of how it recognizes revenue in its finances. This was made known through an internal memo that was shared with workers of the company recently.
According to the memo, the founder and chief executive of the firm David Baszucki said that the SEC was demanding that the gaming company be more specific and recognize revenue on consumable products as they are being consumed. And at the same time, the agency wants the firm also separately to recognize the durable services revenue. The company was previously looking to lump these revenues together and treat them the same way previously.
Baszucki added that the new accounting position demanded by the SEC was going to make the Roblox revenue higher. However, bookings, daily active users (DAUs), hours of engagement, and cash flow will remain the same. He also added that it would take a while before all of these changes are updated into the firm’s financial statement.
Earlier this month, the firm had said it hoped to be listing its shares on the New York Stock Exchange (NYSE) by February. This played a part in skyrocketing the firm’s value to over seven times what it was valued previously. Its previous value stood at $4 billion.
Roblox Corp’s public listing has been one of the most anticipated listings in the United States in recent times; the firm is undoubtedly one of the leading gaming sites for children. It offers a host of games across mobile devices and gaming consoles. The firm has seen its user base surge by a whopping 82% which increased the daily users to over 31 million active gamers. The novel coronavirus might have played a part in this as its video games’ popularity increased with the enforced lockdown, which left many children seeking new indoor fun activities.
This would not be the first time the firm is suspending its listing plan. The gaming company had told its workers in December that it was going to hold its listing plan until 2021 because it was working with advisers on improving the process so that it may be favorable to both its employees and investors. The firm’s earlier listing plan was to go public through an initial public offering (IPO), but that has been changed into a direct listing instead.