Roblox surges on first trading day
San Mateo game company stock closes at $69.50
When the pandemic forced people indoors a year ago, many passed the time by playing games on their iPhones, building gaming computers and exploring the latest blockbuster titles on their Xbox and PlayStation consoles.
For video game companies, that has meant gushers of cash. A record $56.9 billion was spent on gaming last year in the United States, up 27% from 2019. On Wednesday, the pandemic’s booming effect on gaming was even more starkly on display when Roblox, a gaming platform aimed at children, went public.
The San Mateo company opened its first day of trading at $64.50 a share, up more than 43% from a reference price of $45 that was set Tuesday. That valued Roblox at $41.9 billion, up from $4 billion just over a year ago. The stock closed at $69.50, up 7.75%.
“The game industry’s swimming
in cash,” said Joost van Dreunen, a New York University professor who studies the business of video games. “It’s just raining money on these people, on these companies.”
Roblox’s performance was another sign of an increasingly hot initial public offering market. The investor demand for fastgrowing young companies has been so off the charts that Roblox decided in December to delay its listing.
That hype has been compounded for Roblox by the euphoria over video gaming in general. But with vaccinations rolling out and pandemic restrictions easing in some places, gaming behavior may begin to change.
“There’s going to be a lot less time to play Roblox,” van Dreunen said.
David Baszucki, Roblox’s chief executive and a founder, said he does not expect the platform to hemorrhage players when the pandemic ends.
“We don’t think we’re going to lose all of that, or all of the amazing people we’ve gathered,” he said.
Roblox, which went public in a direct listing in which no new shares were issued, was founded in 2004. The site, which was released in 2006, is an online universe in which players can interact and choose from more than 20 million unique games. Players pay for premium memberships, as well as for items and clothing for their avatars.
Its growth was turbocharged last year by the pandemic. On average, 32.6 million people a day logged into Roblox, nearly double the 2019 average of 17.6 million, the company said. While Roblox is unprofitable, its revenue surged 82% to $924 million last year.