Roku has been valued around $1.3 billion after it announced its IPO prices at $14 per share. The company raised $45 million in November of 2016 to reach a valuation of $992 million, according to PitchBook, and has since raised more than $200 million in private funding. The price has been confirmed by both Dow Jones and CNBC.
The company is best known for its video-streaming devices that give users the ability to watch their favorite video outlets like Netflix, Amazon, YouTube, Hulu and countless other platforms. It surprised many to see such a high pricing on its shares, but this number will have a positive impact on other technology companies seeking to place higher IPO prices.
According to Fox Business, “A solid trading debut by the maker of media-streaming devices and software would be a welcome reprieve for a slice of the market that has been slow and suffered a pair of big stumbles, casting doubt on the valuations of Silicon Valley startups.” Regarding its recent earnings for the past year, Roku gathered $199.7 million in revenue during the first six months of this year, which was a 23 percent increase from the same period in 2016.
Many technology experts and investors anticipated low numbers for tech offerings since many publically traded tech companies have historically outperformed the general stock market. 2017 hasn’t shown great figures, as only 19 tech companies have listed their shares in the United States, per Dealogic. Around this time last year, the figure was even lower at 16 companies making their debuts.
Although Roku’s pricing nears the end of the spectrum, it is unlikely that the number of tech IPOs will surpass the 26 that had occurred last year. Nonetheless, Roku is entering a fairly broader market; technology stocks are experiencing high trends. In fact, Dealogic reports that the companies that went public since the beginning of 2017 “are up 32 percent on average since their debuts compared with roughly 22 percent average gain for overall IPOs through [this past] Tuesday’s close.”
Roku’s impressive numbers will give other tech companies the idea of going public, and given Roku’s valuation, they will not regret their decision to participate in the stock market.