Roku IPO: Shares up 30 percent in morning trading

So why should investors roll the dice on Roku when it begins trading at $14 a share?

The company's revenue comes from the sale of Roku TV streaming devices, advertising and subscriptions.

The 32.6% market share for Roku of America's connected TV users that exceeded 150 million was head of Chromecast of Google at 29.9%, Amazon Fire TV at 26.2%, and Apple TV at 19.8%. We connect consumers with the content they love.

The shares priced at $14 each, the top of the company's expected range, suggesting strong demand from investors and valuing the company at $1.3 billion. But the Los Gatos, Calif. -based company still loses money: It posted a net loss of $42.8 million in 2016, steeper than the $40.6 million the year before. Its filing have shown that Roku lost $42.8 million in 2016 on almost $399 million in revenue, up 25 percent from 2015.

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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.

Roku users during the first half of 2017, streamed over 6.7 billion hours on its platform, the company announced.

Roku earlier this month broke the news of its IPO in an SEC filing detailing the process. All told, Roku has raised $208 million in funding. Although it lacks the deep pockets of competitors such as Apple and Amazon, Roku has received financial backing from a bevy of media conglomerates including 21st Century Fox, Viacom and the Britain's Sky.

Last year, Roku got 74 percent of its revenue from selling streaming devices - its player - with the rest coming from its software platform. The company brought in $398.6 million in revenue past year, up 25% from $319.9 million in 2015.

(Copyright © 2015. All Rights Reserved.)
 
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