Roblox online game service.
Lionel Bonaventure | AFP | Getty Images
Roblox has postponed plans to go public due to a U.S. Securities and Exchange Commission investigation into how the video game platform recognizes revenue in their finances, according to a memo issued by the company to staff Thursday.
The delay is a solution for one of the most anticipated U.S. public market debates in 2021. The company had said in a regulatory filing earlier this month that it was targeting shares listed on the New York stock exchange in February.
Roblox was valued at $ 29.5 billion in a fundraising round earlier this month, more than seven times the $ 4 billion the company had valued at 11 months earlier, amid a rise in capital. popular video games during the COVID-19 pandemic.
The SEC has doubts about the way Roblox recognizes revenue from the sale of its frontier currency, Robux, on its platform, according to the memo seen by Reuters.
Players use Robux in the game to purchase a variety of durable and long lasting edible items and products. Roblox had looked to treat all revenue in the same way and leverage it over the period of its paid user accounts, which is about two years.
The SEC wants Roblox to be more accurate and recognizes revenue on edible products as they are consumed, while still recognizing the stable services over the life of a Roblox user, the memo said.
“By adopting that accounting position, our revenue will be slightly higher, as long as registrations, DAUs (daily active users), contact hours, and cash flow do not change,” founder and CEO David Baszucki wrote in the memo to Roblox employees, whom he referred to as “Robloxians.”
“However, it will take some time for us to update this change in our financial statements,” he said.
A Roblox spokesman declined to comment.
This is not the first delay on the registration plans. Roblox told employees in December that he canceled the listing until 2021 because he was working with advisors to advance the process to benefit employees and investors. The company completed gear changes and said they would look to go public through direct listing instead of the original public offering (IPO).
Roblox’s revenue – based on its previous definition of the metric – jumped 68% to $ 588.7 million for the first nine months of 2020. The company reported a potential net loss to customers. common shares of $ 203.2 million compared to $ 46.3 million a year earlier.
Roblox, which is among the world’s most popular children’s play sites and offers a number of games across mobile devices and game consoles, said its daily active user base has grown 82% to 31.1 million in the nine months ended September 30 from the same period a year ago.
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