Roku, the maker of popular streaming players and a software apps and advertising platform, priced its IPO of 15.66 million shares at $14 per share, pricing it at the high end of an earlier announced range of $12 to $14 per share.
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The IPO values Roku at about $1.32 billion. Roku shares, offered under the “ROKU” ticker, will debut on the Nasdaq market today (Sept. 28).
Roku said it’s issuing and selling 9 million shares of Class A common stock while selling stockholders are selling an additional 6.66 million shares. Roku and the selling stockholders have also granted the underwriters a 30-day option to purchase up to an additional 2.35 million shares.
Roku is going public as competition continues to heat up in the streaming device and software sector. Rival Amazon just launched a new Fire TV dongle device that supports 4K and HDR for $69.99, and Apple recently introduced a pricier 4K version of the Apple TV. Google, meanwhile, continues to make inroads with its Chromecast platform (for separate streaming adapters and TVs) as well as Android TV.
Roku has fared well so far in the streaming battle, as its lead in the sector in the U.S. rose to 37% in Q1 2017, from 30% a year ago, according to Parks Associates. Amazon, meanwhile, saw Fire TV market share jump to 24%, from 16%, while Chromecast and Apple TV both suffered declines.
Heading into the IPO, Roku filed documents showing that the company generated revenues of $199.7 million for the first six months of 2017, up 23% from the prior year period. For all of 2016, it generated $398.6 million, up 25% from the $319.9 million brought in during 2015. Roku also posted a net loss of $24.2 million in 2017 through June 30.
The bulk of Roku’s revenue comes way of sales of streaming players, with the balance from its Platforms business, which includes advertising, subscription revenue sharing, and licensing fees from TV makers that have integrated Roku’s OS (its TV partners include RCA, TCL, Element Electronics, Hitachi America, Haier America, Sharp, and Insignia/Best Buy).
Morgan Stanley & Co. and Citigroup Global Markets are the lead bookrunners for the offering. Allen & Company and RBC Capital Markets are acting as book-running managers, and Needham & Company, Oppenheimer & Co. and William Blair & Company are acting as co-managers for the offering.
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