Shares of Roblox jumped 54.3% to close at $69.47 at the end of its first day of trading. Shares were rising 0.96% in after-hours at last check.
Based on the company’s opening trade, Roblox is valued at about $42 billion, The Wall Street Journal reported.
The San Mateo, Calif., company began trading through a direct listing of 199 million shares, bypassing the traditional route of an initial public offering.
Posts on social media platforms including Reddit suggested the company’s shares will draw a wave of buying from ordinary investors who catapulted valuations of companies like GameStop (GME) - Get Report and AMC Entertainment (AMC) - Get Report, among others, in recent months.
Roblox won't be raising fresh capital. In January, the company raised $520 million in a Series H funding round at a price of $45 a share. The funding round was led by Altimeter Capital, the Menlo Park, Calif., venture-capital firm, and Dragoneer Investment Group, the San Francisco VC and private-equity firm.
In February, Roblox held another fundraising round led by the Menlo Park VC firm Andreessen Horowitz.
A reference price isn’t a direct indicator of a company’s market capitalization.
But at $45 a share, Roblox would have a market value of about $30 billion, Bloomberg reported, citing a person familiar with the matter.
The online gaming platform is popular with the Reddit crowd,
More than 2 million developers produce games for Roblox's free online platform, the company says. The developers then share in the revenue generated by users of the games.
More than 1,250 developers made at least $10,000 last year through virtual sales in their Roblox games, CNBC reported.
Roblox generates revenue through sales of Robux, a virtual currency that players can buy with real money to enhance their experience.
Roblox originally planned an IPO last year. But it held off after company officials decided that the strong trading debuts of Airbnb (ABNB) - Get Report and DoorDash (DASH) - Get Report made it too difficult to determine the right price for its shares, The Wall Street Journal reported.
Programmers David Baszucki and Erik Cassel started Roblox in 2004. Cassel died of cancer in 2013. Baszucki serves as chairman, president and chief executive.
Baszucki remains the company’s largest holder with more than 70% of the voting rights.