Roblox shares many similarities with successful stocks and companies of the past decade. In some sense, these are the most important asset for the company as they are building the 3D worlds that users are interacting with. Roblox was the next iteration of this but centered on helping people interact in a new medium. Initially, they had built a physics tool to simulate different experiments which became quite popular. Roblox was founded in 2004 by Eric Cassel and David Basczuki. In the first three quarters of the year, the company generated $589 million in revenue which was a sharp increase from 2019's $350 million over the same period. Many developers solely focus on creating games for Roblox and are earning six or seven figures. ![]() They can also play games in this metaverse or create games for other users. Roblox is essentially a "metaverse" where users can explore, hang out with their friends, and converse with other users. However, the most staggering is that it has 31.1 million daily active users who spent a staggering 22.2 billion hours on its platform in the first nine months of the year. ![]() Roblox's S-1 reveals an impressive business by any metrics. Both of these paths would avoid such mispricing. Thus, some believe that Roblox will either pursue a "dutch auction" type IPO or go public through a reverse merger with a SPAC. ![]() This created a windfall for people who bought before the IPO and also likely indicates that the offering was mispriced and that the companies left money on the table. Both IPOs opened more than 100% from the prices they were set to open. However, Roblox's decision seems to be based on the huge pops in the first day of trading for Airbnb ( ABNB ) and DoorDash ( DASH ). Normally, a company pulls its IPO when market conditions deteriorate or it becomes concerned that there isn't enough demand for its shares. However, the company pulled its IPO, along with Affirm. Roblox was expected to go public before the end of the year.
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