Roku Announces Potential Pricing for IPO

Roku has filed an amended S-1 form with the U.S. Food and Drug Administration (FDA) for its initial public offering (IPO). The company intends to price its 15.668 million shares in the range of $12 to 14 per share, with an overallotment option for an additional 2.35 million shares. At the maximum price, the entire offering is valued up to $252.25 million. The company intends to list its shares on the Nasdaq under the symbol ROKU.

The underwriters for the offering are Morgan Stanley, Citigroup, Allen, RBC Capital Markets, Needham, Oppenheimer and William Blair.

This company connects users to the streaming content, enables content publishers to build and monetize large audiences, and provides advertisers with unique capabilities to engage consumers.

As of the end of June, Roku had 15.1 million active accounts. By comparison, the fourth largest multichannel video programming video distributor in the United States had approximately 13.3 million subscribers in this time as well. Users streamed more than 6.7 billion hours on the Roku platform in the six months ended in June 2017, 62% growth from the six months ended June 2016.

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From the home screen, users can easily search, discover and access over 500,000 movies and TV episodes in the United States, as well as live sports, music, news and more. Consumers can personalize their content selection with cable TV replacement offerings and other streaming services that suit their budgets and needs.

Ad-supported channels available on the Roku platform include CBS News, Crackle, the CW and Vice; subscription channels include HBO Now, Hulu and Netflix, as well as traditional pay-TV replacement services like DirecTV Now, Sling TV and Sony PlayStation Vue; and transactional channels include Amazon Video, Google Play and Vudu.

In the filing, Roku described its finances as:

We have achieved significant growth. In the six months ended June 30, 2017, we generated revenue of $199.7 million, up 23% from $162.3 million in the six months ended July 2, 2016. In fiscal 2016, we generated revenue of $398.6 million, up 25% from $319.9 million in fiscal 2015. We generate player revenue from the sale of streaming players and platform revenue primarily from advertising and subscription revenue share on our platform.

The company intends to use the net proceeds from this offering primarily for general corporate purposes, including working capital, research and development, sales and marketing activities and capital expenditures.

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