Roblox Corp. RBLX plans to register with the U.S. Securities and Exchange Commission to go public via a direct listing of its stock, instead of via an initial public offering as it had planned.
The San Mateo, Calif., videogame company said it would commence the direct listing after the SEC completes its review process. The number of Class A common shares to be offered hasn't been determined.
Three weeks ago, Dow Jones reported that Roblox delayed its IPO. Reports say the company delayed the IPO after DoorDash and Airbnb shares rose sharply in early trading.
More than 2 million developers produce games for the Roblox platform, the company says. The developers then share in the revenue generated by users of the games.
Bloomberg reported that Roblox also has been expanding focus to enable kids to attend virtual birthday parties and concerts with friends. And with schools shut during the pandemic, Roblox has been used to teach courses, the news service reported.
So far this year, valuations for technology companies that have gone public registered a median of 23.9 times their revenue for the 12 months prior to going public, University of Florida business professor Jay Ritter told The Wall Street Journal.
On Wednesday, the company also said it raised $520 million in a Series H funding round at a price of $45 a share. The funding round was led by Altimeter Capital and Dragoneer Investment Group.
The funding round values the company at $29.5 billion, according to Roblox.
“While once viewed as a gaming platform, Roblox has emerged as a definitive global community connecting millions of people through communication, entertainment and commerce,” said Brad Gerstner, CEO of Altimeter.
In an IPO, underwriters facilitate a company's public offering, helping determine matters like the share price and amount of money to be raised. They then buy the company's shares and sell them to investors. Direct listings enable a company's holders to sell their shares directly to investors without the help of underwriters.
"We believe it is important to acknowledge that the current IPO process is far from perfect. Among other things, the structure often imposes relatively high fees on issuers," the SEC said in a recent statement.