Roku's IPO values the company at $2 billion

What to Watch for in Roku's $219 Million IPO

Roku priced its initial public offering at $14 a share, giving the maker of streaming video players a valuation of $1.3 billion, according to a source familiar with the matter.

The company had recently filed for an initial public offering and late Wednesday had set its IPO price at $14 per share, which raised about $219 million and made for a market value of $1.3 billion. The company has said that the majority of its current revenue comes from streaming player sales. Roku has also seen increasing competition from companies like Apple, Google and Amazon, which all sell their own streaming TV devices.

In an SEC filing, the company disclosed it had about 15.1 million activge accounts and has streamed 6.74 billion hours of content. Roku pulled in $398.6 million in revenue last year, up 25 percent from the year before. The company plans to make more money for every hour of viewing by selling more advertisements within its platform.

One thing long-term investors will want to watch closely is Roku's transition from hardware-generated revenue to subscription revenue.

Indeed, Roku's 32.6% market share of America's 150 million connected TV users a year ago was ahead of Google Chromecast (29.9%), Amazon Fire TV (26.3%) and Apple TV (19.9%), according to research firm EMarketer.


Snap Inc., the biggest technology company to go public this year, has seen the value of its shares almost slashed in half as investors realized, among other things, that Facebook's Instagram could marshal its considerable resources to simply copy Snapchat's features.

Earlier this month, the company launched the Roku Channel, which features hundreds of free, ad-supported movies.

Roku's financial growth also has been impressive.

Snapchat owner Snap Inc (SNAP.N), and meal-kit delivery company Blue Apron Holdings Inc (APRN.N), which listed in the first-half of the year are trading well below their listing prices.

Roku stock is soaring for its Wall Street debut. "These big companies are a force to contend with".

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