Roku IPO: Shares up 30 percent in morning trading

Posted September 29, 2017

It's hoping to grow the number of hours streamed by each user, and monetize the hours through advertising, according to its prospectus. Roku is perhaps most notable for its streaming devices that represent less expensive options than pricey Apple TV, but the company is banking on its platform to fuel future growth.

Now it has to compete with devices from Amazon, Google, and Apple.

Roku was founded in 2002 and has always been admired by even staunch rivals for having crafted perhaps the most elegant user interface in the streaming game.

Snap, Inc., the biggest tech company to have an initial public offering in 2017, has seen its shares slashed nearly in half in value as investors realized that Instagram could use its huge amount of resources, with Facebook being its parent, to simply copy the features on Snapchat.

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Tech IPOs have hit something of a lull but as Business Insider reports, "Roku's revenue is growing fast as cord-cutters and other consumers snap up its devices, the cheapest model of which sells for $30". The company, which makes devices that allow consumers to stream media to their televisions, priced its IPO at $14 a share Wednesday evening. The company plans to make more money for every hour of viewing by selling more advertisements within its platform. The company brought in $398.6 million in revenue previous year, up 25% from $319.9 million in 2015.

Roku Inc. (NASDAQ: ROKU) entered the market with a bang on Thursday morning as one of the most anticipated initial public offerings (IPO) this fall. Menlo Ventures was the largest stakeholder prior to the IPO, owning 35.3 percent of the company. Video player sales dipped 2% to $117 million in the first half of 2017 compared with a year earlier despite a 37% increase in volume sales.

Roku said it generated $199.7 million in revenue in the six month ended June 30. "We're seeing a lot of "me too" ideas".