Who is underpricing Roblox?
Which filed to go public last year was going to debut as any said before the year some. Ipo's went out that were rather exuberantly received. And is that it. Whoa whoa whoa hold on. Because robots was going to let a lot of shareholders sell their shares at the ipo price in the offering and they didn't those shares me miss price fair enough so what they've done is they have raised a five hundred twenty million dollars series. H at eight twenty nine point five billion dollars valuation effectively replacing what they would have done in the ipo raise. And then they're going to direct list. So everyone will be unburdened in able to sell their shares. That they'd like to their experience the traditional ipo process and into the blocks brand a sufficiently large drive interest in the company. Now guys we've all heard ad nauseam complaints from adventure. Classes danny's old stomping grounds. That banks mismanaging. Ipo's underpricing them and rewarding their clients essentially with free money. Here's my question now. Roadblocks us at a price for itself thousand nine point five billion. What do we say out. And it's worth thirty five billion the first day won't they also have yet again mistrial. Peo- does this situation. This new solution actually fix anything. I think one of the big challenges. They faced the raises past brown from driessen. In february twenty twenty it was valued at four billion and they raise one hundred fifty million bucks with tiny percentage. and what. you're seeing the exact same thing this time with the series h five hundred twenty million at twenty nine point five billion valuation one point seven percent solution. So it's very tiny. But i think what they wanted to do was sent a very strong signal to the market of. Here's where we see the price. Today there are investors who are investing at this price. Last price was four billion. This is thirty. And i think they wanted to market support for the argument that they should be valued at this price. I don't think they looked at a lot of the other things on the market. And like wow. It's really hot. That was the story line. And i just. I'm very skeptical. But i think this is a proof point of saying look. There is actually market depth at these prices. And it sets the tone of the ipo more strongly than if they had just gone out. Kind of blindly. When we're i want to get into take on this but like we hear a lot of complaints from these about bankers mispricing. Startups andriessen bought a bunch of shares from roadblocks earlier in twenty twenty out of four billion dollar valuation. Now it's worth thirty. That's seven and a half times as much. Who's underpricing roadblocks. Here is that the bankers. Or is it andriessen horowitz. I have a suspicion. That it's the bbc's. I think it's amazing that we never talked about that. We always say. Oh the cow. Well the vc's did not dramatically underpriced screwing the employees who are doing the work out of equity and a fair representation for the show when you see these numbers. I know you're more early stage person. But how does this make you feel one. That's awesome framing alex. So i love that. I thought about snowflake when i saw robots giving that twenty nine point billion number when snowflake was planning to go public at its last raise it was valued at twelve point. Five billion obviously one of the most successful. Ipo of twenty twenty its market cap on. A went out was thirty three point. Seven billion a huge difference. And i think maybe roe is feeling in some ways. Like snowflake miss price. Let's just feel that confident about ourselves. I don't know if that's a fair enough. Compared because i'm sure they're very different businesses but if robots is misplaced and a lot bigger it will also be one of the most successful. Ipo of all time. The new price for robotics is crazy over you. I think one of the big questions we have to ask what's flow the ipo. Look at this. And i got his ms price. Well at a certain point of you're only doing one point six percent solution like of course you want to get you want to nail it perfectly. But the reality is if you're only bloating one point six percent who cares the question at the. Are you floating fiber shares ten percent of the shares thirty percent of the shares. Because that to me is a huge difference compared to some of these earlier rounds where the delusion is much smaller. Yeah for sure. And one thing we've seen just circle back to the point of ipo's being cuoco. Mis-priced is a lot of companies have had a very thin flow and start to trade and so you've seen asymmetric demand from retail investors compared to very very limited shares available which of course ratchets up the initial trading price feeding fodder into the argument. That bankers are better pricing. And this is not to defend bankers. The point is this. it's not like everything is as cut and dry as fits into a tweet. That's what i'll say just to be clear. Andriessen is making the most noise about myspace. Ipo's it's actually benchmark. Don't want to conflate everybody in my head is just vc's but it's worth noting that girly for border a bit worker less active invest. Whatever he is america's area go.