It is not a publisher like Activision Blizzard or Electronic Arts because it has only one title, the namesake Roblox which is not a game is more of a platform. Can Roblox grow its users substantially tapping the 24+ segment and APAC? Can it achieve tech style profitability even with the robber-barons controlling the railroads? That will determine if the right price is $15 or $100 per share. The Roblox S1 reveals a surprisingly complex company, with revenue recognized over two years, and the Apple/Google tax representing its biggest cost category. More than 30 million of them log in daily, about 150 million monthly, more than Minecraft or Fortnite. You might not know Roblox, but most 8 to 16-year-olds do. Great disappointment but not much of a surprise given the crazy level of speculation around IPOs and the difficulty for investors to understand Roblox. Update - The Roblox IPO has been postponed to at least January. They will apparently continue with the IPO in any case. Update - Roblox decided to go the private route with a $500M raise from Altimeter and Dragoneer at a $30B valuation or about $50 per share (middle of my range). Not surprising as the P&L is indeed peculiar (and attractive!). Now the SEC has forced another delay in the IPO process, as it needs to better understand the complex revenue recognition criteria Roblox has used. The company said revenue in the first nine months of 2020 rose to $613.9 million compared to $588.7 million in its previous filing, while its losses in that period were at $194.5 million, down from $213.3 million as reported before SEC has forced to update revenue recognition criteria. Update - March as the new IPO date, now a direct listing. Just shy of the bull scenario for the stock I described. Update - Roblox is already listed and trading.
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