The firm can also set the offering period within which investors can buy the stocks and when the offering will be closed.Īdditionally, going public via direct public offering lowers Roblox’s cost of capital by eliminating the intermediaries such as underwriters, investment banks, or broker-dealers. Due to a direct listing, the company can customize the whole issuance process to its needs and interests.Īs the issuer, Roblox can set not only the offering price and the settlement date but also the limit on the number of stocks that one investor can buy and the minimum investment per investor.
Eventually, the price will be dependent on the public investors' demand which may cause its high volatility on the day of its direct listing.īy choosing a direct public offering, Roblox can self-underwrite its stocks and have the terms of the offering under control. The reason behind this decision is the fact that Roblox doesn’t want his underwriters to set a stock price as in a traditional IPO, but has chosen a direct listing to set the stock price by the buy orders the New York Stock Exchange receives.
Roblox is one of few companies which came to a decision that they prefer to go public via direct public offering (DPO) instead of initial public offering (IPO). Marc Stad who is the Founder and Managing Partner of Dragoneer Investment Group said “Roblox has built a unique and imaginative virtual experience with a growing, loyal community, and we’re excited to have the opportunity to support the company at this stage of its development.” Back to top Has Roblox chosen IPO or direct listing? Thanks to private funding, Roblox has acquired solid and reliable partners who believe in the company’s vision and are eager to support its growth. The key investors who participated in this private placement included the following venture capital funds: Altimeter Capital, Dragoneer Investment Group, the Investment Group of Santa Barbara, Warner Music Group, and several current investors, according to the company’s website. In January 2021, Roblox was valued at $29.5 billion after selling 11,888,886 shares and raising almost $535 million through Series H funding at a purchase price of $45 per share. Has Roblox chosen IPO or direct listing?īack to top What is Roblox’s current valuation?.
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