Shares of Roblox Corporation were traded publicly for the first time today on the New York Stock Exchange. Up from a $45 per share reference price, stock in the online game platform started selling at $64.50 per share, rising to above $70 at its peaks before settling at $69.50 for the day. At present, the company's market capitalization—the value of all stock outstanding—is $38.26 billion. That puts Roblox among the largest publicly traded videogame companies in the world, with a higher market capitalization than game giants like Ubisoft, Take-Two, and CD Projekt. Roblox's market cap even pushed past EA's $37.4B.
.@Roblox (NYSE: $RBLX) rings the Opening Bell to celebrate their direct listing on the NYSE 🔔 https://t.co/aFNqDAVuHEMarch 10, 2021
Despite these numbers, Roblox doesn't make nearly as much money as the companies it's being valued alongside. Roblox expects revenue of $1.4 to $1.5 billion this year, while EA expects $5.8 to $6.1. The value of Roblox to investors, then, is about its future growth potential rather than what it's doing right now.
Notably, this debut was not what's called an Initial Public Offering, or IPO, which is designed to raise money for the company by creating new shares. This was instead a direct listing, where company owners are simply allowed to sell their stock on the public market, a strategy which tends to increase or preserve the value of the company's stock for existing shareholders. Direct listing was the strategy Spotify, and to a lesser extent, Slack, used to successfully raise their value. Should the direct listing prove fruitful, as it has so far, it will be easier for Roblox Corporation to raise money in the future.
For more on Roblox, and explainers of how the game works, check out our dedicated Roblox page.
