Quick Notes On Roku’s IPO Pricing

Roku set a price range for its shares today, helping us better understand the value of its IPO and the worth of the company itself.

It being Monday and with Disrupt underway, things are bit hectic in San Francisco. But that’s hardly a reason for us to repine, and Roku has no intention of letting us relax.

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The company released its new S-1/A filing today, bringing with it details regarding its impending public offer.

Now that the company has set a price range, here’s what you need to know about Roku’s upcoming IPO. We’ll move in bullet points and see if we can get them past the copy desk:

• Roku will raise far more than the $100 million it originally listed in its SEC filings. This was expected. As Crunchbase News reported previously regarding Roku’s total IPO raise: “[T]he figure is a widely-recognized placeholder[.] The company could raise more or less in its IPO.” Bingo.
• By pricing between $12 and $14 per share, the company will raise up to $252.3 million. That would include Class A shares sold by the company; Class A shares sold by employees; the option to purchase Class A shares from the company; the option to purchase Class A shares from shareholders. (That’s a fancy way of saying that Roku won’t raise the full $252.3 million itself. It will filter into several pockets; Roku is, however, the largest selling entity by far.)
• Roku will be worth around $1.3 billion if it prices at $14 per share, the high-end of its range.

So is $1.3 billion a good result? It’s better than the company’s rumored-to-be-expected $1 billion IPO valuation that we previously noted. It is also lower than the $1.5 billion valuation that Roku sought on the private markets before moving ahead with its IPO.

Now is the time for the next stage of the game: Does Roku price above range? Bear in mind our closing words from our trip through the firm’s then-fresh S-1:

What Roku is worth, however, is beyond me. With one revenue stream in decline, persistent losses, but big potential, the firm is going to be a fun one to price.

And now we have some more context. However, as implied above, we lack public comps to measure Roku against. Unlike SaaS and other more common businesses that make it to the billion-dollar threshold, perhaps Roku really is a unicorn.