Roblox Corp. shares surged over 60% in their opening trade on the New York Stock Exchange.
Shares of the San Mateo, California-based online game maker, popular with teens, opened for trading at $64.50 apiece, giving the company a $42 billion valuation.
The NYSE set a direct listing reference price of $45, or a $30 billion valuation. A February 2020 funding round gave the company a $4 billion valuation.
A direct listing allows a company to go public without issuing new shares and raising capital. The process allows current investors to begin selling shares once they begin trading on the exchange.
A handful of companies, including Palantir Technologies Inc. and Slack Technologies Inc., have gone public via the direct listing route, following the lead of streaming-music platform Spotify Technology SA’s debut in 2018.
Roblox decided to use the direct listing route after seeing its daily active users grow by 85% to 36.2 million last year as people rode out the COVID-19 pandemic from home. Total hours engaged soared 124% to 30.6 billion, as noted in its SEC filing.
Despite the user growth, Roblox’s net loss grew 256% from the prior year to $253.3 million. The bigger loss was the result of expenses doubling to $1.19 billion, more than offsetting an 82% increase in revenue.
Looking ahead, Roblox expects growth rates in the current year to moderate from last year as social-distancing restrictions ease and the economy normalizes.
Still, the company expects to see "absolute growth in most of our core metrics for the full year," Chief Financial Officer Michael Guthrie said in a filing.
Roblox expects to have 34.6 million to 36.4 million daily active users at the end of the current fiscal year, representing growth of 12% at the high end. Revenue is expected to increase by as much as 64% to $1.515 billion.
Goldman Sachs Group Inc. and Morgan Stanley helped Roblox with its direct listing. Shares trade under the ticker RBLX.