Teens and tweens unite! The next big initial public offering is coming from a household name, and one that is looking to ride a few major trends. That is right. Beloved Roblox, the company behind free-to-play games, is finally coming to the public markets. Here is everything you need to know about the upcoming Roblox IPO.
If you have never heard of Roblox, you may not understand the excitement. The company specializes in free-to-play games that are available on mobile devices like phones as well as consoles. As with other gaming firms, Roblox has also included options to use digital currency to buy premium features.
Importantly, the game is wildly popular, especially among individuals ages 9 through 15.
For investors, much of the specifics of the deal are unclear. What we know now is that Roblox has filed confidentially with the U.S. Securities and Exchange Commission to come public. With that being said, here are some fast facts about the Roblox IPO:
- The company may be considering both a traditional IPO and a direct listing, which tech peers Palantir (NYSE:PLTR) and Slack (NYSE:WORK) have taken in the past.
- Roblox completed a Series G funding round in late February through Andreessen Horowitz. At the time, the company had a $4 billion valuation.
- Leading up to its IPO, Roblox has said it could double that valuation when it comes public.
- Beyond that, investors learned during the Series G round that Roblox has reached 115 million monthly users.
- Roblox also has notched 1.5 billion hours of monthly engagement from those users.
It is clear that we know very little about the Roblox IPO, yet it is generating a ton of buzz on Monday. Why? The answer to that question can be found in the major trends the company rides.
Why the Roblox IPO Really Matters
One of the biggest pandemic trends investors have noted is the rise of interest in stay-at-home entertainment plays. Music, movies, TV — you name it. Along with that, we have seen more consumers than ever turn to gaming. Video games have been a way to pass time, and more importantly, a way to escape the concerns and uncertainty of reality. Plus, many experts believe this trend will continue to accelerate, especially leading up to the launch of new consoles from Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT) in time for the holiday shopping season.
Amid the novel coronavirus, games are just simply top of mind.
That trend has been true for Roblox. Management has said that the pandemic has driven more users to the free-to-play games. For investors now, this could mean that the Roblox IPO comes at the perfect time.
Take, for example, the recent IPO from Unity Software (NYSE:U). That company similarly specializes in software development for video games. Since coming to the New York Stock Exchange in September, shares have gained almost 40%. Could Roblox be next in line for post-IPO stardom?
It appears that many investors think so. Keep an eye on the company for more updates, especially a closer look at its financials.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.