Roku Stock Rises in Market Debut

29 September, 2017, 00:39 | Author: Regina Lloyd
  • Roku Roku TV IPO

Roku Inc. shares jumped more than 65% Thursday on their first day of trade after the company's initial public offering, adding to an initial $1.3 billion valuation.

The company priced its 18 million share offering at $14 per share on Thursday, the highend of the expected range of between $12 per share and $14 per share.

And Roku operates the number-one TV streaming platform in the U.S.as measured by total hours streamed, according to the company's filing.

It's competes against Apple (APPL) and Amazon ( AMZN ) and the Google unit of Alphabet ( GOOGL ) in the dynamic market for streaming TV products and services.




"In order to materially increase the monetization of our platform through the sale of advertising-supported video, we will need our users to stream significantly more ad-supported content", the company warned in its filing. Its filing have shown that Roku lost $42.8 million in 2016 on almost $399 million in revenue, up 25 percent from 2015. Roku does make money by sharing advertising revenue with some of the apps it carries. A cut of subscription revenue from the apps featured on Roku's platform also provides a sizable share of business.

Roku plans to sell 15.8 million shares from both Roku and some of its private shareholders. All told, Roku has raised $208 million in funding. Menlo Ventures was the largest stakeholder prior to the IPO, owning 35.3 percent of the company.

Roku announced that it had generated revenue of just over $199.6 million during the six-month period ending on June 30. But, during the first half of this year, Roku's reported net loss of $24.2 million narrowed from $33.2 million in the first half of 2016.

"That's great growth for them, but that playbook can also be copied", said Kathleen Smith, principal at Renaissance Capital. Roku's offering, on the other hand, plays nice with whatever service you want to watch. "These big companies are a force to contend with".

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