ROBLOX STOCK IPO! HOTTEST IPO OF 2021?
Roblox stock IPO is one of the most Highly anticipated Ipos Of 2021. Roblox is an online gaming Platform and creation system. That’s popular amongst the Reddit Community and younger users Around the world.
It will trade on the New York stock exchange under the ticker Symbol Roblox And will go public via a direct listing of 199 million shares today.
This is a bit different than a traditional IPO because this will not Technically raise the company. Any funds Only private investors in the company Will be selling their shares to the Public. Roblox will be the fifth company to go Public via this direct listing method. The reference price for the IPO will Start at 45 dollars.
But a recent survey of investors by Research firm Bernstein Believe. It can trade in the range of 30 To 120 Once major volatility hits. The market After it starts trading On its first day over. The last year We’ve seen a huge flood into Roblox.
Because many schools were closed due to The Roni And this was the outlet many students. Chose to communicate With their friends daily active users. Ended up jumping 85 percent in 2020 to 32.6 million And the number of hours that players Spent on the app. More than doubled to 30.6 billion Roblox.
Tripled payouts to developers Last year. Even though revenue didn’t exactly Double. Because the company aims to get Top creators. To spend more of their time building for The app.
Also, it’s important to look at it from a Creator’s perspective. Because more than 1250 developers made At least 10 thousand dollars last year. Through virtual sales in their Roblox Games signaling a thriving and growing Economy Within the game. I think that some of the key factors to look Into this IPO is what happens once Schools reopen. I would assume as. We’re opening up the economy. There will be fewer people Spending time Playing games like Roblox.
Online so the Amazing growth they saw over the last year. Can be stunted also because they Haven’t been profitable yet. Because of their increased spending over. The last year it may not be profitable Into the future. This will be also a very important thing to look into. Because if they have to keep burning Through cash to develop new games. To retain new users within Roblox. That Might lead the company towards some Financial issues.
Overall I think that with the economy Reopening many gaming. Online Companies Can’t see a decent decline in revenues. I think it’s possible for the stock to Shoot up a lot in the first few trading days. Because of the hype but also understand. You’re paying 45 dollars Per-share based on a 30 billion dollar market cap valuation.
This is also based on pricing in last Year’s. Insane user growth and revenues. So in my opinion. You will be paying a Premium At a price of 45 dollars especially. If It shoots up to 80 or 100 dollars a Share In the first trading day. Because we all Know retail investors are never able to Get into the base trading price Of an IPO.
We also know that there are Many patterns In IPO trading. Where the stock does Shoot up a lot in the first few trading days. But ends up trading under the price of The IPO Over the next few months. Understand the risks involved with investing in a company that’s still not profitable.
That might see a dip in users and User growth Once the economy fully reopens. Let me know in the comments. If you’re buying Roblox stock And go and get three free stocks using.