Morning Report: Shares of digital streaming media service and hardware shop Roku are up sharply in its first day of trading.
Last night, Roku priced its IPO at $14 per share, the upper end of its $12 to $14 price range. The offering will raise up to $252 million, assuming underwriters exercise their option to purchase additional shares.
However, the firm’s haul thus far is lower than that number. Roku is expected to net around $126 million before the greenshoe option today, as some shares sold in its IPO came from other shareholders in the firm.
And the market has been kind. The stock opened at $15.78 and has since gained even more ground:
Roku was valued at roughly $1.3 billion at the time of its debut. No public-facing market cap markers are live yet, but at the above percentage delta, Roku is now worth just over $1.6 billion in this morning’s trading.
That sum is notable as Roku attempted but failed to raise private capital at a $1.5 billion valuation earlier this year. This may be one of the incredibly rare times in recent history where public markets are proving more amenable to new valuation marks than their private counterparts.
Roku’s IPO is fun for a couple of reasons. First, it exists. IPO cadence remains low compared to historical norms, something that we find dull here at Crunchbase News. Two, and far more critically, the company was hard to price. It’s long-standing hardware business is shrinking, but produces no margin. It is being supplanted by a rising streaming business that does generate gross profit.
But how to value that sort of thing? Well, after going through all the numbers, the answer is $1.6 billion—at least for now.
One more unicorn IPO is in the books. We have updated our public spreadsheet here.
From The Crunchbase Daily:
Roku prices IPO
- Let the fall tech IPO season begin! Roku, the streaming video device and service provider, priced shares for its initial public offering at $14 each, the top of the proposed range. The offering sets an initial public valuation of around $1.3 billion for the Los Gatos, Calif.-based company.
Toshiba to sell chip unit for $18B
- Culminating months of negotiations, Toshiba announced that it has signed an $18 billion deal to sell its chip unit to a consortium led by Bain Capital. The consortium also includes Apple, South Korean chipmaker SK Hynix, Dell, Seagate Technology and Kingston Technology.
Daimler buys carpool startup Flinc
- Daimler is acquiring Flinc, a German peer-to-peer ridesharing service that had previously raised funding from General Motors and other backers. The purchase comes amid a period of accelerating startup investment activity by major automakers.
Startups aim to boost workplace diversity
- Several startups are developing tools for recruiting and hiring that aim to increase workplace diversity. To date, a Crunchbase News analysis found nearly a dozen such companies that have collectively raised over $66 million, with many aiming to increase tech industry employment for women and minorities.
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.