Roku Inc’s trading debut has catapulted it among the biggest gainers for newly listed technology and communications stocks as investors bet on the success of streaming video.
The shares closed at a high on its first day of trading at US$23.50, up 68 percent from its US$14 initial public offering (IPO) price.
That surpassed MuleSoft Inc’s first day rise in March, making Roku the top first-day climber of this year for a US-listed tech company with an IPO greater than US$50 million.
Its first-day performance was the fifth best of the past three years.
Investors bought US$219 million worth of Roku stock, with 15.7 million Roku shares selling for US$14 each. They were initially marketed for US$12 to US$14 apiece.
The company sold 9 million shares, while its biggest investor, Menlo Ventures, sold 6 million.
Roku’s first-day success on Thursday reveals a continuing appetite for tech-related IPOs.
Still, a strong debut has not guaranteed continued gains for two of the year’s highest-profile listings.
Snapchat owner Snap Inc, which had the second-best first day for a tech IPO this year, is trading 15 percent below its US$17 offer price in March.
Online meal-kit delivery service Blue Apron Holdings Inc closed at US$5.59 a share on Thursday, 44 percent below its June debut.
Roku makes devices and software that allow users to stream video onto their TVs from sources such as Netflix Inc, Amazon.com Inc and ESPN.
The company, based in Los Gatos, California, was an early mover in what is now a crowded market for home devices and streaming tools.
Technology giants, including Apple Inc, Alphabet Inc’s Google and Amazon, are now focusing intently on the space.
Streaming video distributors HBO, Hulu or Dish Network, with its live-streaming product Sling TV, see Roku’s 15 million active users as an opportunity to build their customer base, the company’s founder and chief executive officer Anthony Wood said in an interview.
Roku makes money by taking a cut of the subscription or advertising revenue for videos streamed through its platform, he said.
“We’re focused on the big-screen TV,” Wood said. “It’s how most long-form content is watched. For many partners, that’s where the most of their viewing hours come from.”
Three quarters of Roku’s US$398.6 million revenue last year came from selling its player hardware.
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