Video streaming company Roku raises $219M in IPO

Reed Hastings

Late Wednesday, streaming device company Roku said that it will sell 219 million shares priced at $14 apiece that would give it a value of $1.3 billion, when it makes its debut Thursday on Wall Street on Nasdaq using the ROKU ticker symbol. Shares opened for trading at $15.78 a piece.

Like many Silicon Valley tech companies entering the public market, Roku is not profitable. Roku does make money by sharing advertising revenue with some of the apps it carries. Roku pulled in $398.6 million in revenue last year, up 25 percent from the year before.

By comparison, revenue generated on the platform, such as ads and subscription fees, grew 91% year-over-year to $82.4 million in the first half of 2017.

Roku, however, is still unprofitable. But, during the first half of this year, Roku's reported net loss of $24.2 million narrowed from $33.2 million in the first half of 2016.

And Roku operates the number-one TV streaming platform in the U.S.as measured by total hours streamed, according to the company's filing.

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The cash Roku raised today will be used to compete against a host of tech giants. But instead of having to worry about only one major foe, Roku must prove it can outmaneuver a cast of formidable competitors, including Amazon, Apple and Google.

"We are in a golden age of TV", Roku said in its prospectus.

Despite heavyweight rivalry, Roku has managed to find and maintain its footing. (NASDAQ: AMZN)'s Fire TV and Apple Inc.

Roku's edge, it seems, comes in form of its ability to offer everything and not step on any toes. Roku's offering, on the other hand, plays nice with whatever service you want to watch. Investors sent shares surging on the first day, betting the company can fend off larger rivals.

It could become the mother of all technological revolutions. Earlier reports suggested that the company had been targeting a $1 billion market cap.

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