Roku made a smashing debut on Wall Street on Thursday, with the streaming mainstay darting up more than 60 percent in its first day of trading.
The company — which specializes in streaming hardware and competes with tech heavyweights like Apple and Amazon — priced its 18 million shares at $14 a piece. Listed under the convenient ROKU trading symbol on Nasdaq, shares opened at $15.78 and shot north of $21.00 by midday trading.
“We’re very excited, it’s a milestone day for us and another great day of validation for streaming overall,” CFO Steve Louden told TheWrap. “The tailwinds related to streaming are increasingly apparent to folks. Just last week Hulu won the best Emmy for Drama for a streaming TV show for the first time ever.”
With nearly 50 percent of the streaming device market share, Roku is in position to monetize its popularity. Beyond hardware sales, Louden pointed to revenue shares from subscription services and capitalizing on advertisers turning to streaming.
“We’re founded on the belief that all TV will be streamed,” said Louden. “In the U.S. alone there’s $70 billion alone in traditional TV advertising that’ll increasingly come to streaming. And we’ve positioned ourselves as a leader in the over-the-top advertising space.”
Despite operating in a competitive space, Roku has shown its affordable hardware can hold its own against Apple TV and Amazon Fire. Its high end product, Roku Ultra, can run about $130, although many streamers opt for its $30 Roku Express device. Roku has 5,000 streaming channels in the US and more than 3,000 internationally. Netflix is Roku’s most popular source of content, making up one-third of all Roku streaming.
The Los Gatos, Calif.-based company filed for its initial public offering on the first day of September, boasting it had more than 15 million active users that watched three hours of content each day on average. Roku posted a net loss of $42.8 million in 2016, but reported $398.6 million in revenue — a 25 percent bump from 2015.
Morgan Stanley and Citigroup spearheaded the IPO.
6 Tech Giants Shaking Up News, From Jeff Bezos to Laurene Powell Jobs (Photos)
Tech leaders are increasingly intertwined with the news business. While some want to support old properties, one set out to destroy a new one. Here they are.
Jeff Bezos – Washington Post
The Amazon founder purchased the Washington Post in 2013 for $250 million in cash. President Trump has called the paper the “Amazon Washington Post.”
The Facebook co-founder purchased The New Republic in 2012, becoming executive chairman and publisher. However, he sold the venerable political magazine to Win McCormack in 2016, saying he "underestimated the difficulty of transitioning an old and traditional institution into a digital media company in today’s quickly evolving climate."
The eBay founder is a well-known philanthropist who created First Look Media, a journalism venture behind The Intercept. Inspired by Edward Snowden's leaks. Omidyar teamed up with journalists Glenn Greenwald, Jeremy Scahill and Laura Poitras to launch the website “dedicated to the kind of reporting those disclosures required: fearless, adversarial journalism.”
The PayPal co-founder doesn’t own a news organization, but he makes this list because he essentially ended one -- Gawker -- proving once again the power of an angry billionaire. Thiel secretly bankrolled Hulk Hogan’s sex-tape lawsuit against Gawker Media because he was upset that the website once outed him as gay. Hogan won the defamation lawsuit against the site that sent its parent company into bankruptcy, and Gawker.com is no longer operating.
OK, so Facebook isn’t technically a news organization… yet. However, the company is preparing to launch its much-anticipated lineup of original content later this summer, and there are also signs that it's on the verge of becoming an even bigger media platform.
Campbell Brown, Head of News Partnerships at Facebook, confirmed last week it’s developing a subscription service for publishers willing to post articles directly to Facebook Instant Articles, rather than their native websites.