The online gaming company Roblox filed its IPO prospectus last week, joining a growing list of companies that are trying to go public before the end of the year.
The company’s third quarter revenue increased 91% from last year to $242 million. The company’s net loss more than doubled to $48 million, however.
Roblox’s platform contains millions of games that can be played across Apple, Google, Amazon, as well consoles like Microsoft’s Xbox and Sony’s PlayStation.
Airbnb and Robinhood have also filed to go public in the last week in order to take advantage of a post-election rally in U.S. stocks.
Demand for high-growth tech names is here as investors try to find the next Netflix, Zoom, or NIO.
The companies filing to go public are attempting to hit the market in the period between Thanksgiving and Christmas, so it’s clear they’re trying to move fast to capitalize on this demand.
What to Do When Roblox IPOs
Roblox was first released in 2006, but it’s safe to say the company hasn’t seen a year like this one.
This is by far the best year in Roblox’s history as daily active users nearly doubled in the period ending in September to 36 million.
And the number of “hours engaged” by these users more than doubled to 8.7 billion.
Popular amongst the kids, Roblox allows users to create a unique avatar that they can play across various games.
The games they play are free, and the business generates revenue from selling digital currency called “Robux” that can be used to buy virtual goods and personalize their characters.
Roblox also makes money by allowing players to rent servers to host virtual birthday parties and other gatherings.
This has been extremely popular during the pandemic.
But whether these types of events will continue growing at the same pace after we return to normal, is questionable to say the least.
This is probably one of the biggest questions you need to ask yourself before you invest in the Roblox IPO or not.
Personally, I’ll be staying away because even though revenues are rising… So are the losses. Remember, the company lost a record $48 million last quarter.
I think Roblox executives are using the public markets to try and boost their own returns because the company raised already raised $4 billion earlier this year!
Don’t invest in the Roblox IPO immediately, but definitely pay attention to how well the company does or not as a public company now and in a post-pandemic world.
If you want to invest in other private businesses to boost your own returns, check this out…
New Law Gives All Americans a Shot at Startup Millions
A recent act of Congress entitled “HR 3606” makes it so virtually all Americans can become angel investors!
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I’m talking about people like:
- Joseph K. of Cincinnati, who says his startup shares are worth “just under $100 million.”
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- And Kurt R. of York, Pennsylvania, who tells us he’s cashing out of his startup for a whopping $17 million.
This is the wealth-building event of the century…
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That’s why ex-Morgan Stanley banker Jason Williams has prepared an urgent presentation called “Angel Investing Unlocked.”
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