Roblox sets date to go public via direct listing

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Roblox, which had delayed its IPO, has set a date for a direct listing of its shares.

The video game company now goes public “on or around March 10,” according to an amended prospectus filed Monday. Roblox is looking to sell 198,917,280 shares, but has not specified a price. In January, the company sold nearly 12 million convertible preferred shares in a private placement at $ 45 per share. Renaissance Capital has said that a listing at this price would value the company at more than $ 29 billion. Roblox said in the prospectus that the opening price of the roughly 199 million shares will be “determined by buy and sell orders collected by the NYSE from brokers.”

Roblox will be the fifth company to go public using a direct listing. Palantir Technologies (PLTR), Asana (ASAN), Slack Technologies (WORK) and Spotify Technology (SPOT) all used a direct quote when they first started out in the stock markets.

Roblox will trade on the New York Stock Exchange under the symbol RBLX. Goldman Sachs, Morgan Stanley and Bank of America are acting as financial advisers in connection with the transaction.

Founded in 2004, Roblox hosts kid-friendly games that focus on digital characters resembling Lego blocks. On average, 37.1 million people come to Roblox daily to play games.

The business is not profitable. Losses widened to $ 253.3 million for the fiscal year ended Dec. 31, from $ 71 million in losses for the same period in 2019. Revenue increased nearly 82% to $ 923.9 million dollars, for the period of December 31. It has 960 full-time employees. David Baszucki, co-founder of Roblox, chairman and chief executive officer, has 70.1% of the vote in total, the prospectus says.

Roblox’s path to a direct list was not straightforward. In November, the company initially filed for an IPO as part of a traditional initial public offering. Then, in December, he delayed the offer after the strong start of

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(DASH) made it too difficult to determine the right price for stocks.

Roblox in January changed their mind about a traditional IPO, choosing to go public via direct listing.

Roblox’s change came after the Securities and Exchange Commission approved a rule change by the New York Stock Exchange that allowed direct floor listings in December. Companies that use direct floor listings can now sell new stocks and raise new capital in one large transaction directly on the stock exchange without underwriters.

Direct lists aim to level the playing field for investors. The price is set by the orders received by the exchange. For example, a designated market maker will determine Roblox’s opening public price based on the buy and sell orders the NYSE collects from brokers. The market maker will decide on Roblox’s opening price in consultation with its financial advisers, Goldman, Morgan and BofA.

This is different from traditional IPOs, where the underwriters fix the price of the offering. This sometimes leads to big pops on the first day of trading.

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