LOS GATOS — TV streaming startup Roku filed for a $100 million IPO on Friday, setting the stage for a public-market test of the company that seeks to compete with big-name industry players like Amazon, Google and Apple.
That means the Los Gatos-based company could launch its roadshow as soon as Sept. 18, and start trading by the week of the 25th, said Matt Kennedy, an analyst at Renaissance Capital, which manages IPO-focused exchange-traded funds. He said Roku could end up raising more than $100 million.
Like many Silicon Valley tech companies entering the public market, Roku is not profitable. The startup generated a net loss of $24.2 million on revenue of $199.7 million during the first six months of the year, according to the document filed with the SEC. But Roku shows “fairly impressive growth,” Kennedy said. The company pulled in $398.6 million in revenue last year, up 25 percent from the year before.
And Roku operates the number-one TV streaming platform in the U.S. as measured by total hours streamed, according to the company’s filing. As of June 30, Roku had 15.1 million active accounts. But in an era when consumers are increasingly looking to “cut the cord” and replace cable TV with online streaming options, Roku has plenty of competitors.
“Being able to out maneuver Amazon will raise some eyebrows, get some attention,” Kennedy said. “I guess the question is: for how long?”
Roku makes streaming players that connect to customers’ TVs, as well as Roku TVs that have streaming capabilities built-in. Its streaming service offers users access to programming from Netflix, Hulu, Amazon Video, HBO and more.
The company was first rumored to be planning an IPO back in 2014, but that deal never materialized. Since then, Roku has added new revenue from its streaming services to the money it originally raked in via hardwale sales.
But recent lackluster public market debuts from Blue Apron — which closed Friday trading at about half its IPO price — and Snap — which was trading at 16 percent below its IPO price — could be a warning sign for Roku.
“IPO investors are very valuation conscious,” Kennedy said. “I would think that Roku should expect that their deal will be scrutinized. Investors will be very tuned into the growth of the platform piece and when they’re going to become profitable.”
Roku intends to trade on the NASDAQ under the ticker symbol “ROKU.”
Published at Fri, 01 Sep 2017 23:29:15 +0000