Gaming platform Roblox delays listing plans due to SEC scrutiny

Roblox

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 that last for a period of time and consumable goods that 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.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.