Roku Prices IPO at $14, Spikes in Market Debut

Caleb Ford September 29, 2017
Roku Prices IPO at $14, Spikes in Market Debut

Roku Inc.’s sold 15.7 million shares at a better than expected $14 a piece ahead of its initial public offering (IPO), valuing the company, which made its debut on NASDAQ on Thursday, at $1.3 billion.

The video streaming platform trading debut has thrown it among the biggest gainers for newly listed technology and communications stocks as investors bet on the success of streaming video.

The shares closed at a high on its first day of trading at $23.50, up 68 percent from its $14-a-share initial public offering price. That surpassed MuleSoft Inc.’s first-day rise in March, making Roku the top first-day climber of 2017 for a U.S.-listed tech company with an IPO bigger than $50 million. Its first-day performance was the fifth best of the past three years.

The enthusiastic response to Roku’s $252-million initial public offering comes despite concerns the Los Gatos, California-based company is up against the world’s biggest technology giants, namely Amazon, Apple and Google.

Investors bought $219 million worth of Roku stock, with 15.7 million Roku shares selling for $14 each. They were initially marketed for $12 to $14 apiece. The company sold 9 million shares, while its biggest investor, Menlo Ventures, sold 6 million.

Roku’s first-day success on Thursday also reveals a continuing appetite for tech-related IPOs. Still, a strong debut hasn’t guaranteed continued gains for two of the year’s highest-profile listings.

Snapchat owner Snap Inc., which had the second-best first day for a tech IPO this year, is trading 15 percent below its $17 offer price in March. Online meal-kit delivery service Blue Apron Holdings Inc. closed at $5.59 a share on Thursday, 44 percent below its June debut.

Roku makes devices and software that allow users to stream video onto their televisions from sources such as Netflix Inc., Amazon.com Inc., and ESPN.

Roku, based in Los Gatos, California, was an early mover in what’s now a crowded market for home devices and streaming tools. Technology giants including Apple Inc., Alphabet Inc.’s Google and Amazon.com Inc. are now focusing intently on the space.


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Caleb Ford

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