Exclusive: SEC scrutiny delays Roblox stock current market listing | Reuters | Company

By Joshua Franklin

(Reuters) – Roblox Corp has postponed ideas to go community mainly because of the U.S. Securities and Exchange Commission’s scrutiny of how the video clip game platform recognizes revenue in its finances, in accordance to a memo the corporation sent to personnel on Thursday.

The delay is a setback for one particular of the most eagerly-anticipated U.S. public marketplace debuts of 2021. The firm experienced claimed in a regulatory filing previously this thirty day period that it was aiming to list shares on the New York Stock Exchange in February.

Roblox’s valuation skyrocketed to $29.5 billion in a fundraising round before this month, far more than 7 moments the $4 billion the enterprise was valued at 11 months previously, amid a surge in the popularity of video clip online games through the COVID-19 pandemic.

The SEC has reservations above the way in which Roblox acknowledges profits from the sale of its currency, Robux, on its platform, in accordance to the memo viewed by Reuters.

Gamers use Robux in the sport to acquire a mix of sturdy goods which very last for a interval of time and consumable products which are utilised straight away. Roblox had appeared to treat all the revenue the same and amortize it more than the duration of its paying out person accounts, which is all over two decades.

The SEC needs Roblox to be much more precise and realize earnings on consumable products and solutions as they are consumed, when the tough products and services will even now be identified above the life of the Roblox consumer, the memo reported.

“By adopting that accounting situation, our revenue will truly be a bit greater, when bookings, DAUs (everyday lively consumers), hours of engagement, and income stream will not change,” founder and main government David Baszucki wrote in the memo to Roblox employees, who he referred to as “Robloxians.”

“It will, however, consider us some time to update this modify in our fiscal statements,” he mentioned.

A Roblox spokesman declined to remark.

This is not the 1st hold off to the listing strategies. Roblox instructed employees in December it had set off the listing until eventually 2021 as it labored with advisers to enhance the procedure to profit workers and traders. The company finished up switching gears and claimed it would look to go general public by way of a direct listing in its place of an initial general public offering (IPO).

Roblox’s earnings – based mostly on its previously definition of the metric – jumped 68{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to $588.7 million for the first 9 months of 2020. The business noted a internet loss attributable to popular shareholders of $203.2 million when compared with $46.3 million a yr previously.

Roblox, which is amongst the world’s most well-liked gaming websites for youngsters and features a host of online games throughout cell gadgets and games consoles, reported its day-to-day lively user base soared 82{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to 31.1 million in the nine months finished Sept. 30 from the identical time period a 12 months back.

(Reporting by Joshua Franklin in Miami Enhancing by Ana Nicolaci da Costa)