Roku gains as much as 65% in trading debut after IPO

Reed Hastings

Reed Hastings

Now investors are raising a similar concern about the company behind the tech world's latest initial public offering, the video streaming service Roku, which begins trading Thursday on Nasdaq.

At the $14 per share price, Roku's market cap comes in at about $1.3 billion. The company aims to increase advertising sales through the platform, which is a higher margin business than devices.

In six months ended June 30, Roku had around 15.1 million active accounts, with around 6.74 billion hours of content streamed, the company said in a filing with the U.S. Securities and Exchange Commission. In 2016, it posted a net loss of $42.8 million compared to a loss of $40.6 million the year before.

On Wednesday night, Roku priced its IPO at the top of the range it had originally specified, $12 to $14 per share, aiming to generate more than $200 million with the offering.

Salman Khan to be a dad soon
Har bar bolta hu ke aur nahi karunga (I keep saying that I don't want to do it anymore) but I keep coming back. Giving an answer to this the 51-year-old actor said that Bigg Boss gets its TRP because of him.

Roku has also flourished, seeing revenue jump almost 25% in 2016 to $398.6 million, driven mostly by sales of its devices.

The company is set to capitalize on the growing popularity of streaming content, as over 60% of people between 18 and 29 years of age say they watch television primarily via online streaming, showed results of a survey released this month by survey specialist's the Pew Research Center. 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. All told, Roku has raised $208 million in funding.

Last year, Roku got 74 percent of its revenue from selling streaming devices - its player - with the rest coming from its software platform.

Snapchat owner Snap Inc (SNAP.N), and meal-kit delivery company Blue Apron Holdings Inc (APRN.N), which listed in the first-half of the year are trading well below their listing prices.

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