Looking from another angle, the company’s decision to opt for direct listing also signals that it isn’t lacking cash. Most retail investors can only purchase the shares after the IPO pop, at a higher price. That is because traditional IPO shares are mostly available to institutional investors. In addition, this route is also deemed more favorable among retail investors as the process is fairer to retail investors than in traditional IPOs. This route could save Roblox from paying high underwriters’ fees while still taking the company public. Coupang IPO: What Should Investors Know About This E-Commerce Stock? Roblox Stock Listing Avoids Traditional RouteĪs mentioned, Roblox announced its plan to go public via a direct listing. But we can’t ignore the possibility that Roblox is shaping the future of gaming. I gotta admit that I may be a little old to comprehend that. It’s the place where they spend most of their time interacting with their friends in their virtual world. If you have a kid back home or one of your nieces is in elementary school, Roblox is their Facebook ( NASDAQ: FB). What’s fascinating is that even users who aren’t gamers stick around just to hang out with each other. Simply put, Roblox has a large portion of social elements in its network. This virtuous cycle sustains Roblox’s network effect. And as more users join Roblox’s platform and potentially spend money on those games, it’s natural that developers are incentivized to create more engaging content. Are These The Top Health Care Stocks To Watch Right Now? Gaming Is Just Half The Storyįor those unfamiliar with the game, Roblox can easily attract new users and retain old ones. That’s understandable as people staying at home turn to video games for entertainment. The company attributes this acceleration to the pandemic.
Roblox has seen its daily users skyrocket 85% over the past year, sending sales up 82% along with them. Now, the online gaming platform boasts tens of millions of games played by 32.6 million daily active users. Initially, Roblox had a user base of several hundred people. You could almost compare Roblox to Alphabet’s ( NASDAQ: GOOGL) Youtube, which relies heavily on independent content creators. The company has massive success today because it has a sticky and self-sufficient ecosystem.
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Unlike Electronic Arts ( NASDAQ: EA) and Take-Two Interactive Software ( NASDAQ: TTWO), Roblox users create games and play games created by other users.
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