Online gaming hub Roblox filed to go public Nov. 19 and most recently updated its IPO prospectus on Dec. 1 with plans to go public before the end of the year. But now, Roblox will postpone its IPO into 2021.
Analysts had forecast that if Roblox went public this year, its value could easily reach $8 billion — twice what investors value the company at in a recent round of private fund-raising. But as The Wall Street Journal reported Friday, the explosive IPO action last week surrounding Airbnb (NASDAQ:ABNB) and DoorDash (NYSE:DASH) have given Roblox second thoughts.
Specifically, greedier thoughts.
Airbnb shares more than doubled in price on their first day of trading, and DoorDash did nearly as well, rising 86%. If you’re an investor, that probably sounds like a good thing and has you excited at the prospect of enjoying a huge Roblox IPO this month — but Roblox had a different reaction.
After seeing the huge difference between the prices Airbnb and DoorDash got for their shares, and the value received by the investors who owned them at the end of the day, Roblox management seems to have concluded it would leave too much money on the table if it IPO’ed at the anticipated $8 billion valuation.
So instead, Roblox is going to put its IPO on a shelf, figure out how much it might realistically be able to charge for its shares, and return to the IPO market early next year. Circulating a memo to its employees Friday, Roblox CEO David Baszucki explained that “based on everything we have learned to date … we’ve decided to take this opportunity to work with our advisors to see how we can make such improvements.”
Specifically, “improve” the amount of money it makes from its IPO.