Children’s video gaming company Roblox soars to $47bn in direct public listing

The Roblox logo hangs on the facade of the New York Stock Exchange on March 10, 2021

Credit: Brendan McDermid/Reuters

The children’s video gaming company Roblox achieved a market capitalisation of more than $47bn (£33.8bn) on its first day of trading on Wednesday.

Shares in the San-Mateo-based firm skyrocketed following a direct listing of shares on the New York Stock Exchange, increasing by as much as 16pc in the first few hours.

It follows a bumper year for Roblox as coronavirus lockdowns and the forced move to virtual schooling drove revenue up 82pc to $924m and monthly users up 67pc to an estimated 199m, according to the analytics site RTrack.

Rather than selling its own video games, Roblox makes money from a thriving economy of hobbyist and professional game developers, who used its Lego-like creation engine and online store to earn almost $329m last year.

The company had initially planned to float via a traditional initial public offering (IPO) last year, but changed its plans amid a wild bull run for other tech stocks.

Chief executive David Baszucki hailed the sale as a step towards an online "metaverse", where billions of people would "come together to learn, work and play". 

However, chief financial officer Michael Guthrie told investors that growth rates would slow in 2021, suggesting uncertainty over how the company will fare after reopening.

More than half of all British ten-year-olds played Roblox as of last year

Credit: Roblox

Meanwhile, GameStop investors were in for another rollercoaster ride as the beleaguered game shop chain’s share price plummeted unexpectedly, losing investors more than $100 (£71) per share in a matter of minutes and triggering numerous trading halts.

The volatility is reminiscent of January’s swings, when a flurry of retail traders hyped up the stock on social media to create a short squeeze.   

GameStop’s price almost halved in less than 30 minutes after midday in New York, before slowly climbing again. It had been on track to smash its record closing high of $347.51 but tumbled to less than Tuesday’s closing price of $246.90.

Shares had popped this week after GameStop announced it had hired Ryan Cohen, the founder of pet food site Chewy.com. Mr Cohen will hire a host of executives to lead its customer care and online retail operations.