Roku stock rises 67% on the first day of trading
Digital streaming company Roku went public on Thursday, September 28. The company’s IPO (initial public offering) was set at $14 per share, which is at the higher end of its estimated IPO of $12–$14 per share. The company’s IPO raised nearly $220 million. On Thursday, Roku opened at $15.80 and closed at $23.50, a whopping 67% jump. Roku generated revenue of $399 million in fiscal 2016 but lost $43 million, compared with revenue of $320 million and a net loss of $38 million in the year prior.
Video streaming business getting more competitive
Roku’s IPO has come as the video streaming market is growing more competitive. Competitors include Apple TV, Alphabet’s (GOOG) Chromecast, and Amazon’s Fire TV, among others. Amazon (AMZN) and Apple (AAPL) also unveiled their latest high-definition streaming devices this month.
After their high-profile IPOs this year, Snap (SNAP) and Blue Apron (APRN) saw their stock tank. Since then, investors have worried about startup valuation. Snap stock has fallen 15% since going public, while Blue Apron stock has fallen 44% since its IPO in June. Whereas Roku made a promising start on its first day, the next few months will reveal whether the IPO was successful. Snap also had a good debut, but disappointed investors later.