Roblox sets the date to go public through a direct offer

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Roblox, which postponed its initial public offering, has set a date for an immediate listing of its shares.

The video game company is now going public “on or around March 10,” according to an amended prospectus filed Monday. Roblox wants to sell 198,917,280 shares, but has not specified a price. In January, the company sold nearly 12 million convertible preferred shares through a private placement for $ 45 per share. Renaissance Capital said a listing at that price would value the company at more than $ 29 billion. Roblox said in the prospectus that the opening price of the approximately 199 million shares would be “determined by buy and sell orders collected by the NYSE from broker dealers.”

Roblox will be the fifth company to go public through a direct listing. Palantir Technologies (PLTR), Asana (ASAN), Slack Technologies (WORK) and Spotify Technology (SPOT) all used a direct listing when they made their debut in the public stock market.

Roblox will be traded on the New York Stock Exchange under the ticker RBLX. Goldman Sachs, Morgan Stanley and Bank of America are acting as financial advisers to the deal.

Founded in 2004, Roblox offers kid-friendly games that focus on digital characters that resemble Lego blocks. On average, 37.1 million people come to Roblox every day to play games.

The business is not profitable. Losses amounted to $ 253.3 million for the year ended December 31, compared to $ 71 million in losses for the same period in 2019. Sales increased nearly 82%, to $ 923.9 million, for the period from December 31. It has 960 full-time employees. David Baszucki, co-founder, president and CEO of Roblox, has 70.1% of the total voting rights, the prospectus said.

Roblox’s path to a direct listing was not an easy one. In November, the company initially applied to go public through a traditional IPO. Then, in December, it delayed the offering after the strong debuts of

Airbnb

(ABNB) and

By Dash

(DASH) made it too difficult to determine the right price for stocks.

Roblox changed its mind about a traditional IPO in January and opted to go public via a direct listing.

Roblox’s move came after the Securities and Exchange Commission approved a rule change of the New York Stock Exchange that allowed direct listing in December. Companies using direct listing can now sell new shares and raise new capital in a single large transaction, directly on the exchange, without underwriters.

Direct quotes are intended to level the playing field for investors. The price is determined by the orders received by the fair. For example, a designated market maker will determine Roblox’s public opening price based on buy and sell orders that the NYSE collects from broker dealers. The market maker will determine the opening price of Roblox in consultation with its financial advisors, Goldman, Morgan and BofA.

This is different from traditional IPOs, where underwriters determine the price of the offering. This sometimes leads to big pops during the first day of trading.

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