Coupang (CPNG proposed) raised its price range early today to $32 to $34 – up from $27 to $30 initially – amid reports of huge demand for this $4 billion IPO by “the Amazon of South Korea.” About the same time, the phones at IPOScoop started ringing wildly as investors sought more information on video game platform Roblox (RBLX proposed), which was scheduled to price its direct listing tonight. (Editor’s Note: The column was updated after 5 p.m. EST Tuesday with news from the NYSE on the reference price for Roblox.)
Both Coupang and Roblox are generating the kind of excitement normally reserved for a new sneaker drop or Beyonce concert tickets – in pre-pandemic times.
Coupang’s IPO is scheduled for pricing Wednesday night to start trading Thursday, March 11, on the New York Stock Exchange.
The Roblox deal, which is a direct listing and NOT an initial public offering, was set for pricing tonight after the market’s closing bell.
After 5 p.m. EST today, the NYSE said the reference price is $45 per share for the Roblox direct listing. That announcement set off a flurry of headlines from Bloomberg, MarketWatch, Barron’s and other financial news services.
The NYSE announcement also said: “NOTE: The Reference Price is NOT an Offering Price. The opening public price will be determined by buy and sell orders collected by the NYSE from broker-dealers. Based on such orders, the Designated Market Maker will determine an opening price in consultation with a financial advisor and pursuant to applicable NYSE rules.”
Roblox shares of Class A common stock are expected to start trading Wednesday, March 10, on the NYSE.
The Ka-Ching! Factor
Coupang’s new price range represents an increase of 15.8 percent, pushing the mid-point price up to $33 from $28.50 initially. The number of shares remained the same at 120 million. (Source: S-1/A filing dated March 9, 2021.) The company’s market valuation is now about $56.6 billion, up from the estimated market cap of about $53 billion under its initial terms.
Goldman Sachs, Allen & Co., J.P. Morgan and Citigroup are the joint book-runners.
Coupang, based in Seoul, South Korea, gives its customers the convenience of ordering “everything from tomatoes to TVs,” as the prospectus puts it, and getting fast home delivery – the same day on some items in some locations and next-day delivery on most merchandise.
SoftBank’s SVF Investments and BlackRock are among the major shareholders.
From the standpoint of revenue alone, Coupang is a money machine. The company reported 2020 revenue of $11.97 billion – up about 91 percent from its 2019 revenue of $6.27 billion.
Coupang’s gross profit, defined as net sales minus cost of sales, equaled $1.986 billion for 2020, compared with $1.033 billion for 2019, according to the prospectus.
The bottom line, though, is clear: Coupang is not yet profitable: It reported a net loss of about $475 million for 2020, compared with a net loss of about $699 million for 2019.
Among the risk factors: Coupang is facing political pressure at home over its labor practices following reports of workers’ deaths due to overwork, The Financial Times reported on Monday. See the link here: Coupang’s New York listing clouded by worker deaths | Financial Times (ft.com)
Raking in the Robux
It’s no exaggeration to say that investors appear to be ravenous for Roblox (RBLX proposed) shares. At the NYSE reference price of $45, this direct listing of 198.9 million shares of Class A common stock would have estimated proceeds of $8.95 billion. But the direct listing is likely to bring in much more than that when the shares start trading on Wednesday on the NYSE.
Goldman Sachs and Morgan Stanley are acting as financial advisors.
Roblox, based in San Mateo, California, is a popular video game platform and social network that lets users create games by designing avatars. Roblox has its own currency called Robux, which users purchase so they can buy things for their avatars – and that generates revenue for Roblox.
From the prospectus: “An average of 37.1 million people from around the world come to Roblox every day to connect with friends. Together they play, learn, communicate, explore, and expand their friendships, all in 3D digital worlds that are entirely user-generated, built by our community of over 8 million active developers. We call this emerging category “human co-experience,” which we consider to be the new form of social interaction we envisioned back in 2004. Our platform is powered by user-generated content and draws inspiration from gaming, entertainment, social media, and even toys.”
Roblox was a clear winner during the pandemic lockdown when children turned to the video game platform to connect digitally with their friends for hours.
Here are some key stats from the Roblox prospectus:
*Daily active users (DAUs) on Roblox grew to 32.6 million in 2020 from 17.6 million in 2019 and 12.0 million in 2018.
|*Revenue grew to $923.9 million in 2020, up from $508.4 million in 2019 and $325.0 million in 2018.
*Net loss widened to $253.3 million in 2020 from $71.0 million in 2019 and $88 million in 2018.
For an interesting take on Roblox, you may want to check out this story from The Motley Fool:
For an overview of the IPOs scheduled for pricing so far this week, please click on the link to IPO Calendar: IPO Calendar | IPOScoop
(For more information about these companies, please click the hyperlinks, which will take you to the IPO profiles on IPOScoop.com.)
(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)
Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.
Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.