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Roblox toys are on display at a toy fair in London.
Leon Neal / Getty Images
The New York Stock Exchange said late Tuesday that the reference price for Roblox, which will go public tomorrow, is $ 45 a share.
With approximately 652 million shares outstanding, the reference price indicates that Roblox’s market capitalization could be as much as $ 29.3 billion.
Roblox is trading on the NYSE under the symbol RBLX on Wednesday. Approximately 199 million Roblox shares will hit the market, but unlike a traditional IPO, the company is not raising new capital through the offering. Instead, holders will sell shares they already own.
The $ 45 reference price does not mean that Roblox stock will start trading there. Rather, it is intended as a guide that informs the public of recent private trading activities, according to a person familiar with the situation.
Direct listings aren’t new, but they’ve gotten some attention lately. Roblox will be the fifth company to go public with this method.
Palantir Technologies (ticker: PLTR), Asana (ASAN), Slack Technologies (WORK) and Spotify Technology (SPOT) all used direct quotations to make their public debut in the stock market. Companies do not typically raise capital through direct listings, although the Securities and Exchange Commission approved a rule change proposed by the NYSE in December that would allow a company to do so.
Roblox does not receive any proceeds from shareholders who sell their shares.
Goldman Sachs
Morgan Stanley
and
bank of America
advise Roblox on the deal.
When Spotify was made public on the NYSE in 2018, the reference price was the level of the last secondary private transactions. In Slack’s 2019 listing, the benchmark was closely informed by the volume-weighted average price of the recent secondary trading activity, but it wasn’t the exact average, the person said.
Unlike the price range set by the insurers of a traditional IPO – usually a reasonable indicator of the bid price – the reference price is not particularly useful as a measure of where a directly quoted stock will trade.
Both Palantir and Asana went public in September using direct offers. Palantir’s reference price was $ 7.25, but the stock opened at $ 10 on September 30, reached as high as $ 11.42 and closed at $ 9.50. While Asana’s reference price was $ 21, it opened at $ 27, peaked at $ 29.96, and finished at $ 28.80.
Founded in 2004, Roblox offers kid-friendly games that focus on digital characters that resemble Lego bricks. On average, 37.1 million people come to Roblox every day to play games.
Roblox is not profitable. Losses amounted to $ 253.3 million in 2020, compared to $ 71 million in 2019. Sales increased nearly 82% to $ 923.9 million. David Baszucki, co-founder, president and CEO of Roblox, has 70.1% of the total voting power, according to the prospectus.
Write to Luisa Beltran at [email protected]