Shares of 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
Roblox is one of the most popular games out there, a parallel to Minecraft in some ways, but more than that, a platform for game development. Developers make games through Roblox's tools and can then profit off of them via an in-game currency called Robux. An average of 32 million players log on to Roblox daily, and in fiscal year 2020 Roblox s spent $1.9 billion on the game platform. Roblox developers are paid 70 percent of the money spent on their games, and more based on the amount of time that Roblox subscribers spend in what they've made.
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.
