Roku Inc. shares jumped more than 65% Thursday on their first day of trade after the company's initial public offering, adding to an initial $1.3 billion valuation. The 15.7 million shares were priced at United States dollars 14 each, the top of the USD 12-14 price range.
Roku dongles and set-top boxes offer its users access to channels that are free such as YouTube, channels that are subscription based such as Netflix, and cable channels such as HBO and CNN. Apple, Amazon, and Google are all selling streaming hardware, and both Amazon and Google have partnered with TV makers to get their software operating systems on brand-new sets. According to the company's filing with the Securities and Exchanges Commission, advertising accounted for 67 percent of Roku's non-hardware revenue for the first half of 2017. This compares to $320 million in revenue and $38 million in losses for 2015.
Snap was the biggest technology company to go public this year, but since its much-hyped IPO, its stock value has been cut nearly in half as investors saw how easily Facebook (FB - Free Report) 's Instagram could simply copy Snapchat's most popular features.
Roku will issue and sell 9 million shares of Class A common stock and the selling stockholders will sell an additional 6,668,000 shares of Class A common stock, totaling 15,668,000 shares in all.
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Roku's financial growth also has been impressive. Menlo Ventures was the largest stakeholder prior to the IPO, owning 35.3 percent of the company. But, during the first half of this year, Roku's reported net loss of $24.2 million narrowed from $33.2 million in the first half of 2016.
Roku announced that it had generated revenue of just over $199.6 million during the six-month period ending on June 30.
Smith noted that the other high-profile tech public offering of the year, Blue Apron, will soon be directly challenged by Amazon, which filed a trademark for its own meal kit service earlier this year.
Roku stock is soaring for its Wall Street debut.