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Shares of Roku Inc. blasted off in their stock market debut Thursday, trading up as much as 65% to add to the streaming device company's initial $1.3 billion valuation.

Roku is expecting to price its IPO in the $12 to $14 range and raise roughly $220 million.

All three offer streaming video boxes featuring the most popular apps, such as Netflix and Hulu, to the growing number of cord-cutters untethering themselves from cable television.

Roku is best know for selling affordable boxes that allow consumers to stream Netflix, YouTube and other streaming video services to their televisions. The company brought in $398.6 million in revenue previous year, up 25% from $319.9 million in 2015.

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Based in Los Gatos, California, Roku is known for those tiny little black boxes that you can access Netflix (NFLX - Free Report), and unsurprisingly, it makes most of its money from selling its streaming video players.

However, there are some pitfalls to be wary of: the online streaming industry has a few very big players involved and Roku might be considered a small boat on this very big ocean. The company takes a cut of advertising revenue from apps on Roku devices and it's become an increasingly important part of Roku's financials. This includes ad sales on advertising-supported channels, but also licensing fees, fees for placement in the Roku channel store and more.

Roku is actually losing money on its hardware even though it generates such a large percentage of the company's revenue. Users streamed more than 6.7 billion hours on the Roku platform in the six months ended in June 2017, 62% growth from the six months ended June 2016. 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.

Smith noted that the other high-profile tech public offering of the year, Blue Apron, will soon be directly challenged by Amazon, which filed a trademark for its own meal kit service earlier this year. "We're seeing a lot of "me too" ideas".


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