Roku spikes more than 10 percent on opening day of trading

Posted September 29, 2017

The company was trading at $15.78 when the market opened and had jumped to $18 just before 8:30 a.m. - above the $14 per share price the company set the day before.

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. Roku set a price range of $12 to $14 a share in its prospectus. Services like Netflix, Hulu and Amazon Prime Video also have Roku channels that can be added to Roku-powered devices.

Roku said it generated $199.7 million in revenue in the six month ended June 30.

But the Los Gatos, Calif., company also saw more red ink spill during the year as its net loss widened to $42.8 million, compared with $40.6 million in 2015, as it ramped up spending across the company.

"We depend on a small number of content publishers for a majority of our streaming hours, and if we fail to monetize these relationships, directly or indirectly, our business could be harmed", the company said in the filing.

In addition to sales of Roku players and TVs, the company has been expanding its advertising business. It now has 15 million monthly active accounts, and boasts 6.74 billion hours of content streamed.

It's competes against Apple (APPL) and Amazon ( AMZN ) and the Google unit of Alphabet ( GOOGL ) in the dynamic market for streaming TV products and services. According to research firm EMarketer, Roku claims 32.6% of the country's 150 million connected TV users in 2016, ahead of Google at 29.9%, Amazon at 26.3%, and Apple at 19.9%.

Even though CEO Wood isn't anxious about his company's ability to compete, investors will have to decide if Roku's market share and option-oriented platform are enough to set the streaming device maker apart. Roku's offering, on the other hand, plays nice with whatever service you want to watch. This gives Roku a total market capitalisation of around Dollars 1.3 billion.