Economy

Gadget maker Roku's stock soars after IPO raises $219M

Gadget maker Roku's stock soars after IPO raises $219M”

CNBC reported yesterday that Roku's $2 billion stock market value, following its opening-day pop, gives the company a price-to-sales ratio of 5.2, according to FactSet, marking a big premium over out-of-favour hardware companies FitBit and GoPro.

On Thursday, over-the-top (OTT) TV set-top-box maker Roku witnessed almost a 70% gain from its $14 opening price. Statista reported earlier in September that Roku's household penetration in the U.S.is almost three times that of some competitors like Apple Inc (NASDAQ: AAPL)'s Apple TV and 2 percent higher than Amazon's streaming stick. With its software, Roku is trying to get into the more lucrative advertising business.

"When we sign up a customer to a subscription service or Hulu or Netflix, we get a revenue share as well", Wood said. In 2016, Roku said it had $400 million in revenue.

Other market commentators were left stupefied by what exactly investors see in the company, a platform that enables users to stream content directly to their televisions.

Those numbers, however, have not translated into profitability as the company pumps cash into marketing and R&D. In the quarter ended June 30, the company posted a net loss of $15.5 million, deeper than its $14.1 million loss in the year-ago quarter.

Roku's shareholders include Menlo Ventures, Fidelity and Rupert Murdoch's Twenty-First Century Fox.

Shares of Roku, an early player in streaming-video gadgets, soared Thursday after its initial public offering of stock raised $219 million.



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