Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

In this insight, we provide an updated valuation analysis on the <a href="https://www.smartkarma.com/entities/roblox-corp" target="_blank" data-smartkarma-citation="entities:29697:1" rel="noopener">ROBLOX Corp (RBLX US)</a> direct public listing. The company has provided a guidance that it plans to complete its direct listing on or near March 10th. The company has also provided the full year results in 2020. Roblox plans to sell 198,917,280 shares in this direct listing. In January 2021, the company sold about 12 million shares of convertible preferred stock in a private placement at $45 per share, valuing the company at<a href="https://www.barrons.com/articles/roblox-sets-date-to-go-public-through-a-direct-listing-51614036401" target="_blank" rel="noopener"> $29.5 billion. </a><div class="content-highlight">Our revised valuation of Roblox is an implied market cap of $49.4 billion and implied price of $75.3 per share. Our valuation of the company has been slightly lowered by 1.2% versus our previous estimate. At a valuation of $49.4 billion, this would represent 67% higher levels than the last private market value of $29.5 billion.</div>

In this insight, we provide an updated valuation analysis on the ROBLOX Corp (RBLX US) direct public listing. The company has provided a guidance that it plans to complete its direct listing on or near March 10th. The company has also provided the full year results in 2020. Roblox plans to sell 198,917,280 shares in this direct listing. In January 2021, the company sold about 12 million shares of convertible preferred stock in a private placement at $45 per share, valuing the company at $29.5 billion. Our revised valuation of Roblox is an implied market cap of $49.4 billion and implied price of $75.3 per share. Our valuation of the company has been slightly lowered by 1.2% versus our previous estimate. At a valuation of $49.4 billion, this would represent 67% higher levels than the last private market value of $29.5 billion.

Roblox Direct Public Listing Valuation Update

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

The Roblox IPO is attracting significant attention from investors and the media, most of it very complimentary. While we also generally like the company’s business model and positioning, after examining some of its numbers, we see some potential issues. Since the bull case is being very thoroughly covered elsewhere, we will examine some weaknesses we see in the company’s business model. For some positive views please refer Douglas Kim and Andrei Zakharov’s work: <a href="https://www.smartkarma.com/insights/roblox-corp-ipo-preview" target="_blank" rel="noopener">Roblox Corp IPO Preview | Smartkarma</a><a href="https://www.smartkarma.com/insights/roblox-valuation-analysis" target="_blank" rel="noopener">Roblox Valuation Analysis | Smartkarma</a><a href="https://www.smartkarma.com/insights/roblox-dpo-going-public-through-a-direct-listing-instead-of-a-traditional-ipo" target="_blank" rel="noopener">Roblox DPO. Going Public Through A Direct Listing Instead Of A Traditional IPO | Smartkarma</a>

The Roblox IPO is attracting significant attention from investors and the media, most of it very complimentary. While we also generally like the company’s business model and positioning, after examining some of its numbers, we see some potential issues. Since the bull case is being very thoroughly covered elsewhere, we will examine some weaknesses we see in the company’s business model. For some positive views please refer Douglas Kim and Andrei Zakharov’s work:  Roblox Corp IPO Preview | SmartkarmaRoblox Valuation Analysis | SmartkarmaRoblox DPO. Going Public Through A Direct Listing Instead Of A Traditional IPO | Smartkarma

Roblox IPO – Let’s Look at the Negatives

Roblox, one of the leading global game platforms, announced on Friday (8 January) that it plans to go public through a Direct Public Listing (DPL), instead of the traditional IPO. Ahead of this direct public listing, <a href="https://www.cnbc.com/2021/01/08/roblox-expects-direct-listing-on-nyse-in-february.html" target="_blank" rel="noopener">Roblox</a> raised $520 million in private financing, valuing the company at $29.5 billion or $45 per share.<div class="content-highlight">Our valuation analysis suggests a base case implied market cap of $50 billion and a target price of $76.20 per share for Roblox. This would represent 69% higher level than its most recent private capital raise of $520 million, valuing the company at $29.5 billion or $45 per share. The direct listing valuation range is from $40.5 billion to $60.5 billion, according to our valuation sensitivity analysis. </div>

Roblox, one of the leading global game platforms, announced on Friday (8 January) that it plans to go public through a Direct Public Listing (DPL), instead of the traditional IPO. Ahead of this direct public listing, Roblox raised $520 million in private financing, valuing the company at $29.5 billion or $45 per share.Our valuation analysis suggests a base case implied market cap of $50 billion and a target price of $76.20 per share for Roblox. This would represent 69% higher level than its most recent private capital raise of $520 million, valuing the company at $29.5 billion or $45 per share. The direct listing valuation range is from $40.5 billion to $60.5 billion, according to our valuation sensitivity analysis. 

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

The online gaming and entertainment technology decacorn Roblox intends to sell of up to ~197 million shares of Class A common stock through a direct listing in February. The opening public price of common stock on the NYSE will be determined by buy and sell orders collected by the NYSE from broker-dealers. Roblox has the largest global online gaming community with more than 150 million MAUs and ~75% of all American children ages 9-12 play Roblox. In 2019 Roblox entered into a JV agreement with Songhua, an affiliate of Tencent Holdings to pursue opportunities of expanding business in China.Goldman Sachs and Morgan Stanley are lead financial advisors on the upcoming DPO. Roblox raised ~$856 million in funding over 9 rounds, according to Crunchbase. Their latest $520 million Series H round was led by Altimeter Capital and Dragoneer Investment Group.Altos Ventures, Tiger Global Management, Andreessen Horowitz, Investment Group of Santa Barbara and Warner Music Group also participated in this funding round. The Series H round valued Roblox at ~$29 billion, assuming a purchase price of $45 per share.

The online gaming and entertainment technology decacorn Roblox intends to sell of up to ~197 million shares of Class A common stock through a direct listing in February. The opening public price of common stock on the NYSE will be determined by buy and sell orders collected by the NYSE from broker-dealers. Roblox has the largest global online gaming community with more than 150 million MAUs and ~75% of all American children ages 9-12 play Roblox. In 2019 Roblox entered into a JV agreement with Songhua, an affiliate of Tencent Holdings to pursue opportunities of expanding business in China.Goldman Sachs and Morgan Stanley are lead financial advisors on the upcoming DPO. Roblox raised ~$856 million in funding over 9 rounds, according to Crunchbase. Their latest $520 million Series H round was led by Altimeter Capital and Dragoneer Investment Group.Altos Ventures, Tiger Global Management, Andreessen Horowitz, Investment Group of Santa Barbara and Warner Music Group also participated in this funding round. The Series H round valued Roblox at ~$29 billion, assuming a purchase price of $45 per share. 

Roblox DPO. Going Public Through A Direct Listing Instead Of A Traditional IPO

<div class="content-highlight">
This is our second annual edition of the IPOs Pipeline Worldwide (Top 100 Companies)report. This year has been a superb year for the global IPO market and the pipeline of the global IPOs remains robust in 2021. Among the 100 potential IPOs, they are from 16 countries, including the US, China, India, UK, and Indonesia. We estimate that of these 100 companies, more than half should be able to complete their IPOs in 2021. 
Most of the IPOs in this list have more than $1 billion in market cap. We believe that the first half of 2021 is likely to be a more active market than the second half of the year, as the companies and the bankers attempt to capitalize on the continued strong momentum for IPOs globally. 
This report is meant to serve as a comprehensive, reference guide to help clients so that they could get a broad view of the major IPOs that could get completed next year on a world-wide basis. 
</div>


This is our second annual edition of the IPOs Pipeline Worldwide (Top 100 Companies)report. This year has been a superb year for the global IPO market and the pipeline of the global IPOs remains robust in 2021. Among the 100 potential IPOs, they are from 16 countries, including the US, China, India, UK, and Indonesia. We estimate that of these 100 companies, more than half should be able to complete their IPOs in 2021. 
Most of the IPOs in this list have more than $1 billion in market cap. We believe that the first half of 2021 is likely to be a more active market than the second half of the year, as the companies and the bankers attempt to capitalize on the continued strong momentum for IPOs globally. 
This report is meant to serve as a comprehensive, reference guide to help clients so that they could get a broad view of the major IPOs that could get completed next year on a world-wide basis. 


2021 IPOs Pipeline Worldwide (Top 100 Companies)

United States

Roblox Corporation provides entertainment products and services. The Company designs and develops a wide range of online games such as internet three-dimensional and tutorial games for kids, teens, and adults. Roblox serves customers worldwide.

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ROBLOX (RBLX US)

Roblox Direct Public Listing Valuation Update

Our revised valuation of Roblox is a market cap of $49.4 billion and implied price of $75.3 per share which would represent 67% higher levels than...

Douglas Kim

Roblox IPO – Let’s Look at the Negatives

Since the bull case for Roblox is being very thoroughly covered elsewhere, we will examine some weaknesses we see in the company’s business model.

Mio Kato

Roblox Valuation Analysis

Our base case valuation for Roblox is $50 billion and a target price of $76.20 per share. This would represent 69% higher than its most recent...

Douglas Kim

Roblox DPO. Going Public Through A Direct Listing Instead Of A Traditional IPO

Roblox is the most innovative company in gaming space and largest social platform for play with online gaming community of 150M+ MAUs worldwide

Andrei Zakharov

2021 IPOs Pipeline Worldwide (Top 100 Companies)

This report is meant to serve as a comprehensive, reference guide for the top 100 IPOs worldwide in 2021 to help clients so that they could get a...

Douglas Kim

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