News Profit's Takes

Roblox Valued At $45 Billion After First Day Of Public Trading

Yesterday, Roblox, a gaming platform aimed at children, had an excellent first day of trading. The company closed its first day of trading at $69.50 a share, which was up from $45 a share on Tuesday. As a result, the business is now valued at $45 billion, which is up from its original $4 billion value from a year ago.

Over the past year, $56.9 billion was spent on gaming in the United States. According to the NDP Group, this represented a 27% increase in spending from 2019. Meanwhile, Sony recently reported a 62% increase in profit while Microsoft made $5 billion in quarterly gaming revenue.

David Baszucki is the CEO of Roblox. He says that the future is bright for the company. “Just as the mail, the telegraph, the telephone, text and video are utilities for collaborative work, we believe Roblox and the metaverse will join these as essential tools for business communication,” Mr. Baszucki said “Ultimately, someday we may even shop within Roblox.”

The Profit‘s Take:

Roblox has huge potential given their platform driven strategy. I believe they will figure out how to grow beyond their “just for kids” reputation, but they currently own that space. Their decision to go the direct listing route clearly paid off for them and it will be interesting to see if Epic follows a similar path or goes for the more traditional IPO. Either way, the current Roblox valuation is only about 2 GameStops, so in the current environment, that seems reasonable.

(All information was provided by The New York Times)

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