Roblox debut attains $46 billion valuation

Digital games company Roblox Corp., transformed into a cultural icon during the coronavirus pandemic, made its public debut Wednesday with its shares rising as much as 16% from its opening trades.

Roblox is one of the few companies that have gone public through a direct listing, an alternative to an initial public offering in which the shares begin trading without the company issuing new stock.

The company’s shares, which opened trading at $64.50 apiece, rose to $71.40, giving Roblox a market value of more than $39 billion. The company’s fully diluted valuation, including restricted stock units and employee options, is about $46 billion, making it one of the most valuable companies to go public during the pandemic.

The handful of companies that have done direct listings includes Peter Thiel’s Palantir Technologies and software company Asana in September. Music streaming service Spotify Technology SA went public through a direct listing in 2018 and Slack Technologies followed in 2019.

San Mateo-based Roblox has seen its valuation as well as its revenue and user base grow as the pandemic kept students home and in search of entertainment. The company was valued at about $4 billion in a $150 million funding round in February 2020 that was led by venture capital firm Andreessen Horowitz.

For the nine months ended Sept. 30, Roblox had a consolidated net loss of $197 million on revenue of $614 million.