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Roku to make $219m debut

Roku to make $219m debut

Shares in Roku have soared by 50% in their first day of trading, exceeding $21 midway through the session, pushing the streaming company's market capitalization to more than $300 million. Shares opened for trading at $15.78 a piece.

Apple has its Apple TV device, Amazon has the Fire TV Stick and Alphabet has the Google Chromecast device.

Roku completed a public offering this morning, raising $252 million in an IPO that valued the company at $2 billion.

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".

Roku will issue and sell 9 million shares of Class A common stock and the selling stockholders will sell an additional 6,668,000 shares of Class A common stock, totaling 15,668,000 shares in all.

Roku admitted that the majority of the hours streamed on its platform have consisted of subscription video on demand content from partners like Netflix, which contribute little revenue to Roku. 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.

Roku earlier this month broke the news of its IPO in an SEC filing detailing the process. To date it has raised $200 million in funding. However, rather than being anxious about only one big competitor, Roku will have to fend off others previously named such as Google, Apple and Amazon. Menlo Ventures was the largest stakeholder prior to the IPO, owning 35.3 percent of the company. In the six months to June 30, 2017, Roku made $117,329 from its hardware business, compared to $82,391 from the platform. The company lost $24.2 million in the first half of 2017.

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