Roku Sets The Stage For A Robust IPO

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TV streaming tech company Roku Inc. is going public.


The Silicon Valley company announced late Friday (9/1) that it has publicly filed a registration statement with the U.S. Securities and Exchange Commission relating to a proposed initial public offering of shares of its Class A common stock.

The number of shares to be offered, and the price range for the proposed offering, have not yet been determined by Roku.

However, media reports indicate that Roku sees to raise at least $100 million.

The Los Gatos, Calif.-based firm wishes to trade its Class A common stock on the Nasdaq Global Select Market under the ticker symbol “ROKU.”

Morgan Stanley & Co. and Citigroup Global Markets Inc. are acting as lead bookrunners for the proposed offering. Allen & Company LLC and RBC Capital Markets LLC are acting as book-running managers, and Needham & Company LLC, Oppenheimer & Co. and William Blair & Company LLC are acting as co-managers for the proposed offering.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective.

These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

The offering will be made only by means of a prospectus.

As of June 30, Roku had 15.1 million active accounts. In comparison, the fourth-largest multichannel video programming video distributor in the U.S. had approximately 13.3 million subscribers, making it a highly competitive space.

Users streamed more than 6.7 billion hours on the Roku platform in the six months ended June 30, reflecting 62% growth from the year-ago period.

As noted it is S-1 filing, through the first six months of 2017 Roku generated revenue of $199.7 million, up 23% from $162.3 million in same period of 2016.

In fiscal 2016, Roku generated revenue of $398.6 million, up 25% from $319.9 million in fiscal 2015.

While Roku has a big net loss, it is shrinking: In the six months ended June 30, its net loss was $24.2 million and its adjusted EBITDA was $14 million. By comparison, Roku’s fiscal 2016 net loss was $42.8 million and its adjusted EBITDA was $29.9 million.

Several risk factors are offered by Roku, including this blunt statement:

We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.


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