Roblox, an online gaming platform, today announced that it has filed a draft S-1 confidential registration statement with the Securities and Exchange Commission (SEC), the first step toward a initial public offering (IPO) from its stock. Due to the confidential nature of its filing, the filing is not yet available for review, but the company could go public as soon as early next year.
Due to the pandemic, many consumers have turned to home entertainment and video games to pass the time. Roblox believes it could reach a valuation as high as $8 billion, more than double the $4 billion it fetched in a recent private market fundraising.
In addition to its games, Roblox offers tools for developers to help create games on its platform. The company announced in July that it had 150 million monthly active users. Additionally, he revealed that over 2 million creators on his platform were on track to earn around $250 million in 2020, up from $110 million in 2019.
Popular games on the Roblox platform include Adopt me!a game featuring digital pets that had 10 billion sessions through July, and porcinewhich launched earlier this year and garnered almost 5 billion plays in the first six months after its debut.
Roblox management has yet to decide if the company will go public using a traditional IPO, or if the company will use the alternative direct listing to debut.
Direct Public Listing (DPO) offers several advantages to companies that choose this option. The firm takes on a number of tasks typically done by investment bankers, which could save millions of dollars. Additionally, the shares being sold come from existing shareholders with no new shares offered for sale, preventing the dilution that accompanies a traditional IPO. This allows insiders, employees and existing shareholders to reap the benefits of selling their shares.