Name: Exclusive: SEC scrutiny delays Roblox stock market listing
Brand: reuters.com
SKU: reuters-com-1547
Availability: OnlineOnly

critic

Exclusive: SEC scrutiny delays Roblox stock market listing

preview

By (Reuters) - Roblox Corp has postponed plans to go public because of the U.S. Securities and Exchange Commission’s scrutiny of how the video game platform recognizes revenue in its finances, according to a memo the company sent to employees on Thursday.The delay is a setback for one of the most eagerly-anticipated U.S. public market debuts of 2021. The company had said in a regulatory filing earlier this month that it was aiming to list shares on the New York Stock Exchange in February.Roblox’s valuation skyrocketed to $29.5 billion in a fundraising round earlier this month, more than seven times the $4 billion the company was valued at 11 months earlier, amid a surge in the popularity of video games during the COVID-19 pandemic.The SEC has reservations over the way in which Roblox recognizes revenue from the sale of its currency, Robux, on its platform, according to the memo seen by Reuters.Players use Robux in the game to buy a mix of durable goods which last for a period of time and consumable goods which are used immediately. Roblox had looked to treat all the revenue the same and amortize it over the duration of its paying user accounts, which is around two years.The SEC wants Roblox to be more specific and recognize revenue on consumable products as they are consumed, while the durable services will still be recognized over the life of the Roblox user, the memo said.“By adopting that accounting position, our revenue will actually be a bit higher, while bookings, DAUs (daily active users), hours of engagement, and cash flow will not change,” founder and chief executive David Baszucki wrote in the memo to Roblox staff, who he referred to as “Robloxians.”“It will, however, take us some time to update this change in our financial statements,” he said.A Roblox spokesman declined to comment.This is not the first delay to the listing plans. Roblox told employees in December it had put off the listing until 2021 as it worked with advisers to improve the process to benefit employees and investors. The company ended up switching gears and said it would look to go public through a direct listing instead of an initial public offering (IPO).Roblox’s revenue - based on its earlier definition of the metric - jumped 68% to $588.7 million for the first nine months of 2020. The company reported a net loss attributable to common shareholders of $203.2 million compared with $46.3 million a year earlier.Roblox, which is among the world’s most popular gaming sites for children and offers a host of games across mobile devices and games consoles, said its daily active user base soared 82% to 31.1 million in the nine months ended Sept. 30 from the same period a year ago.Reporting by Joshua Franklin in Miami; Editing by Ana Nicolaci da CostaOur Standards:

By (Reuters) - Roblox Corp has postponed plans to go public because of the U.S. Securities and Exchange Commission’s scrutiny of how the video game platform recognizes revenue in its finances, according to a memo the company sent to employees on Thursday.The delay is a setback for one of the most eagerly-anticipated U.S. public market debuts of 2021. The company had said in a regulatory filing earlier this month that it was aiming to list shares on the New York Stock Exchange in February.Roblox’s valuation skyrocketed to $29.5 billion in a fundraising round earlier this month, more than...

public

Joshua Franklin

Top and breaking news, pictures and videos from Reuters. For more breaking business news, follow @ReutersBiz.

reuters.com

Credible

Speculation

Anecdotal Evidence

Generalization

Stacking the Deck

Appeal to Authority

Straw Man

Slippery Slope

Emotional Appeal

Red Herring

False Dilemma

Illogical

Moral Equivalency

Ad Hominem

Correlation w/o Causation

Semantics

Begging the Question

Faulty Analogy

Non Sequitur

Bandwagon

Dogmatism

Failing Occam's Razor

Biased

Pure Opinion

Hit Piece

Racial Bias

National Bias

Religious Bias

Financial Incentive

Political Agenda

Gender Bias

Misused Image/Video

Study Misinterpreted

Mistake

Misused Term

Science Misrepresented

Factual Error

Satire

Surface Level

Lack of Reliable Sources

Sensational

Not Credible

Investigative

Balanced

Well Sourced

Great Context

sports

entertainment

U.S.

international

business

technology

science

culture

politics

media

health

Exclusive: SEC scrutiny delays Roblox stock market listing

No article scores yet.

CRITIC REVIEWS

PUBLIC REVIEWS