Roblox eyes Reddit meme stock status as public listing looms

Roblox Corp is scheduled to go public on the New York Stock Exchange through a direct listing on Wednesday that is scheduled to see it kick off with a market cap of around US$30bn. On Tuesday evening, the NYSE set a reference price for the online platform, which allows users to create and play video games, of US$45 per share, equal to a recent funding round that valued the group at US$29.5bn. READ: Roblox delays Reddit ‘meme stock’ status as direct listing pushed back to March Roblox had initially been planning to list in February, however, the plan was delayed amid concerns from regulators about revenues from the company’s Robux in-game currency. The company’s decision to opt for a direct listing means existing shares will be floated on the exchange with no underwriters or intermediaries involved, as opposed to an initial public offering (IPO) when new shares are created, underwritten and sold to public investors. In terms of forecasts, Roblox is forecasting daily active users (DAU) for its first quarter to be between 37.6-39.6mln, an increase of 59-68% year-on-year, while revenues are expected to come in at between US$320-US$335mln, equivalent to growth of 98-107%. However, the firm also faces tough comparatives with 2020, which saw lockdown measures confine consumers to their homes and use video games like those on Roblox’s platform to pass the time. Despite this, Roblox could find an ally among those in Reddit’s r/wallstreetbets community, as the platform and its games have often been used as a source for internet memes for many years, lining the firm up as a new potential ‘meme stock’ in the tradition of video game retailer GameStop Corp (NYSE:GME) and cinema chain AMC Entertainment Holdings Inc (NYSE:AMC).