Roblox, which operates an online gaming platform that spans millions of users and millions of variations of games or related interactions, plans to go public on the New York Stock Exchange via a direct listing in February, according to an SEC filing the company submitted.
Roblox previously had planned to go public the usual way, allowing Wall Street investment bankers to find buyers for early blocks of shares before opening a stock to investors in the broader market. But Roblox halted those plans in December after DoorDash and Airbnb held traditional IPOs and in doing so left huge sums on the table as share prices soared once the broader market had access to them.
By switching to a direct listing, Roblox is following firms such as Slack and Spotify that went straight to the broader market.
Direct listings shoulder firms and early investors with certain risks but can be streamlined and straightforward compared to the process of holding a traditional initial public offering. The system of holding direct offerings has the potential to pose a significant threat to traditional, and very lucrative, investment-banking practices.
While preparing for the direct offering, San Mateo, Calif.-based Roblox announced last week that it had raised $520 million through a funding round that put the company’s total value at about $29.5 billion.
Roblox states in its latest SEC filing that on an average day, 36 million people use the platform and that 7 million people are “active developers” building games.
Roblox was cofounded in 1994 by David Baszucki and Erik Cassel.
The company’s roots are in the educational software sector.
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