Why Roblox (RBLX) needs no SPAC for IPO

It may be the season of SPAC (special purpose acquisition company) merger fuelled IPOs but it seems that the online gaming company for kids Roblox would not take that path.

Earlier this year, the company announced that it raised as huge as $520 million in a round of financing from private players. At the same time, the company also announced that it is going to have a direct listing. Considering the fact that the company has managed to raise capital even before its listing, it might not need to go for a SPAC merger in order to go public. Moreover, by way of a direct listing, the existing shareholders in the company and employees who own stock in Roblox are going to be able to sell their holdings to new investors straightaway.

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Although this process has drawn its fair share of criticisms, it is something that has been deployed by companies like Spotify, Palantir, and Slack in the past.

Jack Dawkins

Finance and Tech Contributor