Roblox announces yesterday that they would be skipping an IPO and instead are going with a Direct Listing, which they would do "following completion of the SEC review process". The announcement is below:
Roblox Corporation (“Roblox”) announced today that it plans to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) for a proposed direct listing of its Class A common stock. The number of shares of Class A common stock to be offered by the Company’s stockholders has not yet been determined. Roblox intends to commence the direct listing following completion of the SEC review process, subject to market and other conditions.
What does Roblox going into Direct Listing actually mean?
I'm glad you asked. "Under a direct listing, no shares are sold in advance, as is the case with IPOs." It's still available on the stock market, but the share price of Roblox going into the stock market "is determined by orders coming into the stock exchange." Basically, instead of a price being set by people buying it beforehand and it arriving on the market at that price, the price will be set by orders on the stock market.
Roblox was valued at $30 billion American Dollarydoos, and is the fifth big company to go through with a Direct Listing, following in the footsteps of Spotify. An interesting note is that unlike companies that use an IPO, those that go with a Direct Listing have not (at least traditionally) raised money through Direct Listings.
For more information, be sure to check out the Reuters article. For more details on Roblox, be sure to stay tuned to TechRaptor.
What do you think of this news? Let us know in the comments!
