(Reuters) – Roblox Corp is set to join the ranks of the so-called “meme stocks” such as GameStop at the center of social media-fueled rallies that have gripped Wall Street when the gaming platform becomes a publicly traded company on Wednesday.
The San Mateo, California-based gaming site, whose revenues surged last year as hundreds of millions of kids were marooned in their homes by coronavirus shutdowns, has spent months preparing for its stock market launch.
Roblox is looking to capitalize on a red-hot market for new share issues, and has opted to go public through a direct listing meaning it has not sold any shares in advance of its market debut on Wednesday.
Dozens of posts on social media platforms including Reddit suggest the company’s shares will draw a wave of buying from the army of small-time investors who have shocked institutional investors with their ability this year to move shares in companies including GameStop, AMC Inc and BlackBerry.
The New York Stock Exchange on Tuesday set a reference price of $45 for shares of the U.S. gaming platform, implying a market value for the company of around $30 billion.
Roblox was founded in 2004 by David Baszucki and Erik Cassel, although its journey began in 1989 when Baszucki and Cassel programmed a 2D simulated physics lab that would later lay the groundwork for the company.
Roblox has since grown into a community of more than eight million active developers who produce their own 3D multi-player games each month using the company’s design tool.
On an average 37.1 million people globally log on to Roblox daily to connect with friends, according to the company’s filing, and play some of its most popular games such as “Natural Disaster Survival”, “Murder Mystery 2”, “Jailbreak” and “Speed Run 4”.
In 2020, people stuck at home during the COVID-19 pandemic fueled an 85% year-on-year jump in Roblox’s daily active users to 32.6 million across more than 180 countries.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Anirban Sen and Sriraj Kalluvila)
