![]() ![]() Roblox is a developer made popular by its signature video game that carries the same name. If you have kids or grandkids, there’s a good chance you’ve heard of Roblox. While video game sales are strong, our Stock Power Ratings system shows that not all companies involved are great investments. Statista found that global revenue from video games will reach $298.2 billion by 2027 - a 50% increase from 2021. Millions of people of all ages flock to gaming in many different formats, including consoles like the PS5, or even their phones or tablets. ![]() ![]() That said, I don’t have a ton of time to actually sit down and play video games on it - but I’m an exception to that rule. In late December 2020, however, the Securities and Exchange Commission (SEC) changed the rules around direct listings to allow companies to raise cash through direct listings by auctioning new shares along with those of current shareholders looking to sell.Last Christmas, my wife surprised me with a PlayStation 5. ( WORK) are two notable tech firms that went public through direct listings under the traditional process. Direct listings were essentially undertaken for liquidity reasons, as new capital wasn't raised because only existing shares were auctioned on the market. There used to be a clear line between direct listings and IPOs. Roblox instead completed another round of private capital raising, meaning retail investors are once again missing out on most of the early growth in a tech company.The company's decision highlights some issues with the IPO process, including the difficulty hitting the right price.Roblox has decided to go with a direct listing rather than its planned IPO due to the pricing issues apparent in the market. ![]()
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