Roku Prices Shares at $14, Valuing Company at $1.3 Billion

Lucy Hill
September 29, 2017

The Fox-backed company offered 15.7 million shares at $14, pegging its valuation at $1.32 million.

Streaming company Roku has said it will place $219 million worth of shares on the market when it debuts on the New York Stock Exchange on Thursday.

As of the end of June, Roku had 15.1 million active accounts.

Snap, Inc., the biggest tech company to have an initial public offering in 2017, has seen its shares slashed nearly in half in value as investors realized that Instagram could use its huge amount of resources, with Facebook being its parent, to simply copy the features on Snapchat. Blue Apron, of course, was hit hard by Amazon's (AMZN - Free Report) mega deal to acquire organic grocer Whole Foods, and the investor skepticism that followed.

Roku admitted that the majority of the hours streamed on its platform have consisted of subscription video on demand content from partners like Netflix, which contribute little revenue to Roku. Roku generated $199.7 million in revenue during the first half of this year, up 23% from $162.3 million during the same time last year.

Roku, however, is still unprofitable. The company lost $24.2 million in the first half of 2017.

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Since launching its first device in 2008, Roku has become a market leader for devices that help people stream content directly through their TV sets.

In an interview with CNBC, CEO Anthony Wood said that "Advertising is our bread and butter". Its software is commonly built into smart TVs and hardware like the Roku Premiere and Streaming Stick can easily be connected to older TVs.

Similar concern is being raised about Roku the next tech company in line for an IPO on Thursday.

Despite heavyweight rivalry, Roku has managed to find and maintain its footing. That gives its users more choices for apps rather than being force fed Apple, Amazon or Google content.

Roku's edge, it seems, comes in form of its ability to offer everything and not step on any toes.

Other reports by TheDailyFarc

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