Roblox Corp. shares rallied Wednesday on their first day of trading on the New York Stock Exchange, closing up more than 50%.
shares, which reached an intraday high of $74.83, closed 54.4% above their reference price, finishing the day at $69.50 for a market cap of $37.17 billion. The stock began trading right after 1:30 p.m. Eastern, and by the close, trading volume in Roblox exceeded 95 million shares. The stock’s reference price was $45 a share set by the NYSE late Tuesday.
Sidestepping the initial public offering route, the the tween-centric gaming platform decided to go public through a direct listing, which differs from an IPO in that shares are not backed by underwriters.
In a direct listing, current stakeholders convert their ownership into stock based on trading prices in private markets. In its latest filing, Roblox said nearly 199 million Class A shares had been registered for resale, for a total of about 388.2 million available shares. The public debut of Roblox has been anticipated since word of an IPO began circulating in October.
The company pivoted to plans for a direct listing from a planned IPO back in January after getting a fresh venture-capital infusion of $520 million that valued the company at $29.5 billion.
Roblox reported revenue of $923.9 million and a loss of $257.7 million in 2020, compared with revenue of $508.4 million in revenue and a loss of $71 million in 2019, and revenue of $325 million and a loss of $88.1 million in 2018. The company seeks to grow out its business by retaining its pre-teen users as they grow older while appealing to new users already in their teens or young adulthood.
The past 12 months have been kind to companies going public. As of Tuesday’s close, the Renaissance IPO ETF
has surged nearly 130%, while the S&P 500 index
has risen 41% and the tech-heavy Nasdaq Composite Index
has gained 64%.
More and more companies have opted for direct listings to go public, such as Spotify Technology SA
and Palantir Technologies Inc.
Grocery-delivery company Instacart is reportedly considering the direct-listing route while Coinbase Global Inc. has already announced its intentions.