Roblox executives have delayed its IPO to 2021 to seek a higher price, after last week's Airbnb and DoorDash IPOs soared
- Games startup Roblox delayed its IPO until 2021, with the CEO reportedly telling staff in a Friday memo that executives were working to boost its initial listing price.
- Roblox executives reportedly saw first-day gains from Airbnb and DoorDash as signs that it could improve its eventual listing price by holding off until 2021.
- "We've seen companies take innovative approaches to creating a more market-based relationship between investors and companies," CEO David Baszucki said in a Friday memo shared with Reuters.
Games startup Roblox delayed its IPO until 2021, with the CEO reportedly telling staff in a Friday memo that executives were working to boost its initial listing price.
"We've seen companies take innovative approaches to creating a more market-based relationship between investors and companies," CEO David Baszucki said in the memo, which was shared with Reuters.Said Baszucki: "We've decided to take this opportunity to work with our advisors to see how we can make such improvements."
But after watching last week's DoorDash and Airbnb offerings surge in first-day trading, Roblox executives decided to rethink their timeline, Reuters reported. DoorDash stock almost doubled on its first day, while Airbnb just about tripled from its offering range in a day.By waiting until next year, it may be possible for Roblox executives to work with underwriters and investors to set a higher listing price, bringing in more cash for Roblox on its eventual IPO day.
—Ross Gerber (@GerberKawasaki) December 9, 2020
Roblox stock would be "really, really interesting," wrote Ross Gerber, an investment advisor, on Twitter, before the company delayed.A potential boost in Roblox's listing price could help the gaming company reverse its slide away from profitability. The company logged a daily average of 31 million users in the first nine months of the year. Those users brought in about $589 million in revenue, but the company still lost $203.2 million in the same period, according to its S-1 filing with the SEC. And its loss-making has only accelerated in recent years.
The $203.2 million loss in those nine months was more than it lost in the previous two years combined, with a $97.2 million loss in 2018 and a $86 million in 2019, according to its filing.
If users leave the platform, it may never reach profitability, it said.
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