Roblox – IPO Note 3 (It’s Direct Listing!)

[January 10th, 2021]

Roblox announced few days ago that it raised $520 million in new Series H funding at $29.5 billion valuation and planned to pursue an IPO via direct listing in early February 2021.

It’s management team’s job to maximize the valuation for existing stockholders. By withdrawing from IPO and then raising a private round, Roblox as a company got the liquidity it wanted and its existing shareholders got a valuation they thought satisfactory. In addition, direct listing will increase the likelihood that existing shareholders can timely capture the attractive valuation since none of their shareholders are party to any contractual lock-up agreement or other contractual restrictions on transfer.

No doubt this setup is great for selling shareholders. The series of transactions will be considered as one of the best trades in this run and be written as case study. As a potential buyside of the share in the first trade, you are providing liquidity at a valuation with interesting trajectory to existing shareholders who are long-term, savvy and informative.

In current environment, it’s unwise to suggest avoiding any stock. That being said, you can avoid the disadvantage setup by not being the first trade. Sometimes patience and discipline pay off but stonks might only go up. I don’t know ¯\_(ツ)_/¯.

Rival Peak – Follow Up 1

[December 16th, 2020]

The experimental interactive experience has been up for more than 10 days and has finished the first weekly loop of “heart of experience”, Rival Speak. You can try the reality show / game at fb.gg/play/rivalpeak.

My first impression for Rival Peak before its launch was the experience is not engaging. Now that I have tried the “gameplay” and watched the “show”, the impression hasn’t changed much. I believe there are people who enjoy the experience and find other use cases of the Rival Peak. For example, Rival Peak has great ambience music so some people would just keep it up in the background (like video of 10-hour raining in mountain with campfire category on Youtube).

Maybe it’s due to Facebook platform strategy, Rival Peak has limited social presence outside of Facebook ecosystem. Rival Peak currently lacks discussion on twitter and content on Youtube. The media coverage concentrates on the product launch, not much about the post-launch reception. It will get harder and harder for Rival Peak to gain traction (the constraint comes from design of experience) unless it has extremely strong live ops to do growth hack. Not much time left for this product before it loses momentum and enters into phase out mode (in my previous post, I simply don’t think this product can take off after quickly reviewing its trailer…).

I have no idea what kind of post mortem this product will have but I enjoy more watching VTubers playing Minecraft and chatting in a foreign language that I don’t speak (e.g. Usada Pekora from Hololive).

Do you find it enjoyable to interact with something human-like that takes your inputs to feed the algorithm / model or to watch interaction between algorithms / models based on real-time data input without clear gameplay? During Rival Speak, it’s unbearable to see an interaction with between a human and an “AI” with human-written script voice-acted by another human.

Roblox – IPO Note 2

[December 16th, 2020]

Background

Roblox Corp. delayed its planned IPO after company officials decided that the gravity-defying performance this week of Airbnb Inc. and DoorDash Inc. made it too difficult to determine the right price for the videogame company’s shares.

Dec. 11, 2020 WSJ

Affirm Holdings Inc. is postponing its initial public offering, according to people familiar with the matter, the second company in as many days to pull back from the red-hot IPO market.

The move comes just a day after The Wall Street Journal reported that videogame company Roblox Corp., which was on a similar IPO timetable, put its listing on pause until early next year.

Dec. 12, 2020 WSJ

Note

It’s very common that hot IPOs have massive pop at their debut. The pros and cons between different going public mechanisms have been widely discussed and it’s understandable that companies decided to do last minute market timing for their stakeholders’ interests.

The impact on sentiment from these signaling might change the price behavior of certain “high-valuation” stock. It might take time to digest the impact or the impact might be permanent for those already listed stocks. It will be very interesting to see how these market timing activities end up (how successful they capture the money left on the table? don’t worry, there will be someone to do the math lol).

The moment you think your stock is underpriced, participants start thinking your stock is overpriced. The sentiment might stay for an extended period after listing. The setup becomes not very attractive at the moment.

Rival Peak – Initial Thoughts

Background of Rival Peak

Below is how Facebook describes Rival Peak and its trailer:

Rival Peak is an experimental competition reality show, featuring artificially intelligent contestants whose fate is controlled by YOU, the viewing audience. You can interact with the real-time experience through an instant game right on Facebook.

Rival Peak Official Website

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Initial Thoughts

Do you think the experience presented in the trailer above interesting?

The interactive experience will be launched later today so apparently I get my impression from the trailer. I know it’s totally subjective but at the moment I don’t think the experience is interesting or engaging enough to retain a level of audience / players that Facebook expects.

While I don’t watch reality shows and seldom play role-playing games, my first questions for this interactive experience are:

  • What’s the core experience for a reality show?
  • What’s the core gameplay for a role-playing game?

This experiment blends observing element in reality show (watching someone interacting with others) with immersive element in role-playing game (playing the role of someone) and adds some UGC element (audience decides some parts of the show / game) to create a new category / genre. This new experience feels confusing to me. I hope Facebook finds ways to make the experience enjoyable otherwise this will be just… an experiment where you blend two things together hoping to enjoy both but it turns out you get non.

Nobody cares about the cloud computing or AI stuff in cloud gaming. They are like new capabilities that people expect to have so that the gameplay will be more enjoyable or engaging…

In terms of IP, I think it’s not going to be long lasting. Again, very subjective, maybe it’s due to art style… Developers might further expand the IP during the show / game but I see limited potential overall.

Since it’s a reality show and a game played real time, live ops might be the only place that this experiment can have optionality. At glance, the setup is not very favorable but strong live ops that have quick iteration and creative operation / coordination might be able to turn things around.

It’s difficult to say an experiment is a flop (well it’s an experiment!) and the fact that the show / game is being distributed on a 2B+ social graph guarantees it will have some impressive metrics like peak concurrent viewer / players… That said, given my impression above, I expect retention will be weak even though Facebook might design various loops in the experience to maintain engagement.

People will talk about 2B+ build-in social graph cannot guarantee the success of a confusing experience and that the cloud gaming in this iteration is not what they expect (they’re not surprised or amazed by the experience).

I expect there will be other iterations on the tech but no season 2 for Rival Peak. Maybe I will change my mind after trying the experience.

Wish Rival Peak has a great launch!