Roblox Corp (NYSE:RBLX) shares have surged on Wednesday as the video game platform began its first day of dealings on the New York Stock Exchange after going public through a direct listing.
In mid-morning trading in New York, the company’s shares were trading at around US$71, a strong increase of the US$45 reference price per share the exchange gave the stock on Tuesday evening, which valued the group at US$29.5bn.
Roblox had initially been planning to list in February, however, the plan was delayed amid concerns from regulators about revenues from the company’s Robux in-game currency.
The company’s decision to opt for a direct listing means existing shares will be floated on the exchange with no underwriters or intermediaries involved, as opposed to an initial public offering (IPO) when new shares are created, underwritten and sold to public investors.
In terms of forecasts, Roblox is forecasting daily active users (DAU) for its first quarter to be between 37.6-39.6mln, an increase of 59-68% year-on-year, while revenues are expected to come in at between US$320-US$335mln, equivalent to growth of 98-107%.
However, the firm also faces tough comparatives with 2020, which saw lockdown measures confine consumers to their homes and use video games like those on Roblox’s platform to pass the time.
Despite this, Roblox could find an ally among those in Reddit’s r/wallstreetbets community, as the platform and its games have often been used as a source for internet memes for many years, lining the firm up as a new potential ‘meme stock’ in the tradition of video game retailer GameStop Corp (NYSE:GME) and cinema chain AMC Entertainment Holdings Inc (NYSE:AMC).
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Story by ProactiveInvestors
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