The company priced its 18 million share offering at $14 per share on Thursday, the highend of the expected range of between $12 per share and $14 per share. Roku is perhaps most notable for its streaming devices that represent less expensive options than pricey Apple TV, but the company is banking on its platform to fuel future growth. It offers more than 3,000 channels. But instead of having to worry about only one major foe, Roku must prove it can outmaneuver a cast of formidable competitors, including Amazon, Apple and Google. It's hoping to grow the number of hours streamed by each user, and monetize the hours through advertising, according to its prospectus. Roku is averaging $11.22 in annual revenue per user, which is also up 35 percent year-over-year. Roku does make money by sharing advertising revenue with some of the apps it carries.
Roku offers hardware and a service that lets customers "cut the cord" by streaming their favorite TV shows online instead of watching them via a traditional cable provider.More news: Aston Martin developing personal submarine
Indeed, Roku's 32.6% market share of America's 150 million connected TV users past year was ahead of Google Chromecast (29.9%), Amazon Fire TV (26.3%) and Apple TV (19.9%), according to research firm EMarketer.
Snap was the biggest technology company to go public this year, but since its much-hyped IPO, its stock value has been cut nearly in half as investors saw how easily Facebook (FB - Free Report) 's Instagram could simply copy Snapchat's most popular features. Video player sales dipped 2% to $117 million in the first half of 2017 compared with a year earlier despite a 37% increase in volume sales.
Roku stock is soaring for its Wall Street debut.More news: Are the Star Trek: Discovery premiere ratings stellar for CBS?
Roku announced that it had generated revenue of just over $199.6 million during the six-month period ending on June 30.
"There's too much money chasing too few good ideas", Smith said.More news: Facebook turning over suspected Russian political ad buys to Congress