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How to buy Roblox Corporation (RBLX) stock from Canada when it goes public
Here's everything we know so far about the Roblox Corporation IPO.
Updated . What changed?
Online video game platform Roblox is expected to go public in March. Here’s what we know, including how to buy in when the stock launches.
Thursday, February 11: Roblox plans to begin trading on March 10.
Friday, January 29: Roblox has reportedly postponed its highly anticipated direct listing after the US Securities and Exchange Commission scrutinized the way it reports revenues. The company had been poised to go public in February.
Friday, January 8: Roblox is expected to go public in February.
Thursday, January 7: Roblox completed a private funding round, raising $520 million. The round values Roblox at $29.5 billion. The company also announced that it plans to go public via a direct listing rather than a traditional IPO.
Monday, December 14: Roblox reportedly plans to postpone its IPO into 2021 after initially stating its intention to complete the offering by the end of 2020.
Thursday, November 19: Roblox filed with the SEC to go public on the New York Stock Exchange under the ticker symbol RBLX.
Thursday, November 12: Roblox is expected to make its filing public as early as next week, according to a CNBC report.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
What we know about the Roblox Corporation IPO
The gaming platform announced in January 2021 that it plans to go public via a direct listing rather than an initial public offering. The company intends to list on the New York Stock Exchange under the ticker symbol “RBLX.” An independent valuation report in December 2020 valued the stock at close to $41.52 per share, but it’s difficult to tell where the stock will trade when it does go public. Share prices are determined by the price at which employees and other shareholders are willing to sell and buyers are willing to pay.
In a direct listing, a company can go public without raising funds in an IPO. Additionally, investors can sell their shares without waiting for a lock-up period to expire.
Founded in 2004, Roblox offers a sweeping collection of online games coupled with a game creation system that allows users to program their own games. Amid the pandemic, Roblox has been particularly popular among US kids between the ages of 9 to 12, helping them host hangouts and virtual birthday parties during stay-at-home orders.
We’ll update this page with more information as soon as it becomes available.
How to buy shares in Roblox Corporation when it goes public
Once Roblox Corporation goes public, you’ll need a brokerage account to invest. Consider opening a brokerage account today so you’re ready as soon as the stock hits the market.
- Compare share trading platforms. If you’re a beginner, look for a platform with low commissions, expert ratings and investment tools to track your portfolio. Narrow down top brands with our comparison table.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and bank information. Fund your account with a bank transfer, credit card or debit card.
- Search for Roblox Corporation. Find the stock by name or ticker symbol: RBLX. Research its history to confirm it’s a solid investment against your financial goals.
- Purchase now or later. Buy immediately with a market order or use a limit order to delay your purchase until Roblox Corporation reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. Weigh your budget against a diversified portfolio that can minimize risk through the market’s ups and downs. You may be able to buy a fractional share of Roblox Corporation, depending on your broker.
- Check in on your investment. Optimize your portfolio by tracking how your stock — and the business as a whole — performs over the long run. You may be eligible for dividends and shareholder voting rights on management decisions that can affect your stock.
Roblox’s balance sheet
As a result of stay-at-home orders initiated by the COVID-19 pandemic and consumers seeking at-home entertainment options, Roblox has done well. According to Sensor Tower Store Intelligence, Roblox’s March 2020 revenue increased by 28% month-over-month to $69.8 million, followed by a 34% increase in April to $93.2 million. The momentum carried through to turn May 2020 into a record-breaking month for the company, yielding $102.9 million in global player spending.
The US accounts for approximately 66% of Roblox’s total revenue, but Great Britain and Canada are also big contributors. As of 2020, there are over 164 million people actively playing Roblox. To date, the platform’s mobile app has been downloaded more than 380 million times across the Apple App Store and Google Play.
With the release of its S-1 filing, we had the opportunity to take a closer look at Roblox’s balance sheet. The company reported $349.8 million in revenue for the nine months ended September 30, 2019. For the same period in 2020, Roblox’s revenue rose to $588.6 million. Unfortunately, Roblox’s revenue isn’t the only thing on the rise. For the first three quarters of 2019, it reported a net loss of $46.3 million — a figure that more than quadrupled to $203.2 million in 2020.
Like many tech-oriented startups, Roblox isn’t profitable. And while its revenue appears to be on an upward trajectory, it continues to report sizable losses.
Why was the direct listing delayed?
Roblox initially planned to go public in February, but the launch was delayed by several weeks, reportedly because of questions from the SEC over the way the company recognizes revenue from the sale of its proprietary Robux currency.
Players use Robux to purchase both consumable and durable goods in games. Roblox has been treating all revenue from Robux the same, but in a memo to Roblox employees, founder and CEO David Baszucki noted that the SEC wants the company to be more specific. The SEC, Baszucki said, expects the company to recognize revenue on consumables as they are consumed and revenue on durable goods over the life of the game user.
How do similar companies perform?
It’s impossible to predict how any stock will perform — and IPOs can be particularly volatile. But evaluating the performance of companies like Roblox Corporation can be useful in determining how the market is performing and whether now is a good time to invest in this industry.
Here’s how similar companies have performed:
Compare trading platforms that provide access to Canadian and US stocks
Compare special offers, fees structures and a types of investments that are available with some of Canada’s top stock trading platforms.
Note: The dollar amounts in the table below are in Canadian dollars.
Tax implications of buying US stocks in Canada
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA.
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