The valuation of Roblox also received its boost after the company gave a bullish earnings guidance for the 2021 fiscal year.
Online gaming platform Roblox Corp (NYSE: RBLX) has recorded impressive jumps on its debut on the New York Stock Exchange hitting a market capitalization of $38.2 billion. Per a Reuters report, at its closing price, the company would have a fully-diluted valuation, which includes unvested stock options and restricted stocks, of $45.2 billion.
Roblox’s stock started trading at $64.5 and closed Wednesday’s session at $69.50 a growth of 7.75% from the opening price. The impressive momentum the shares picked beats the reference point of $45 per share set by the NYSE on Tuesday.
“This is a milestone along a journey that started over 15 years ago,” Roblox Chief Executive David Baszucki said in an interview before the stock started trading. “Going public can bring awareness to our company, we can safely show our financials, we can show the value of what we’re doing.”
The outstanding debut performance has placed the gaming platform which was established by Baszucki and Erik Cassel back in 2004, in the same league with other American companies including but not limited to Airbnb Inc (NASDAQ: ABNB), and DoorDash Inc (NYSE: DASH) with remarkable public exchange debuts. Roblox’s public listing was however via a direct listing, allowing its investors or early shareholders to sell their holdings immediately, without being subject to a lockup period.
The platform’s public market debut comes amid the growth in the company’s user base over the past year, as many turned to gaming as the lockdowns get heated up. The company said its daily active users (DAUs) grew to 32.6 million in 2020, compared to 17.6 million in 2019. Roblox estimates 54% of its users are under the age of 13.
Roblox Valuation Jumps amid Ambitious Earnings Guidance
The valuation of Roblox also received its boost after the company gave a bullish earnings guidance for the 2021 fiscal year. While the firm’s revenue jumped to $923.9 million, up from 82% in the year-ago period, the firm still reported a net loss of $253.3 million from $71 million in 2019.
Roblox is projecting its revenue to soar in the 56% and 64% range to between $1.44 billion and $1.52 billion while aiming at turning out profitable based on all of its core metrics.
“We headed into 2020 with strong organic growth which was further bolstered by social distancing restrictions,” Michael Guthrie, Roblox’s finance chief, said in the guidance statement. “As those restrictions ease, we expect the rates of growth in 2021 will be well below the rates in 2020, however, we believe we will see absolute growth in most of our core metrics for the full year.”
Roblox earns its revenue from the sale of its Robux in-game currency with which users can utilize to improve their gaming experience through the sale of clothing, accessories, and other digital items. The firm shares the revenue from the Robux virtual token with the developers building on the platform using its open-source tools.
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