(Reuters) - Shares of video streaming firm Roku Inc (ROKU.O) rose more than 67 percent in their market debut on Thursday, giving the U.S. IPO market a much-needed shot in the arm.
Roku ended trading on the Nasdaq with a share price of $23.50, giving it a market capitalization of about $2.23 billion.
The IPO market is struggling to finish on a high note even though it has already notched more money so far this year than in 2016.
A pioneer in helping consumers cut the proverbial cord from traditional cable television, Roku made one of the first devices to offer streaming content such as Netflix over TVs.
To compete better, Roku has opened its platform to more TV apps than its peers, including Amazon Prime Video, Hulu and Google Play, allowing it to offer over 3,000 channels internationally.
The Los Gatos, California-based company has also shifted its business model from sales of its Roku box. It licenses its software to companies such as Sharp and Hitachi and gets a cut of the advertising revenue from media companies and new signups for apps on its platform.
Roku Chief Executive Anthony Wood said in an interview that the company will keep riding the wave of television content moving online and away from the cable bundle.
“When we sign up a customer to a subscription service or Hulu or Netflix, we get a revenue share as well,” Wood said.
In six months ended June 30, Roku had around 15.1 million active accounts, with around 6.74 billion hours of content streamed, the company said in a filing with the U.S. Securities and Exchange Commission.
Those numbers, however, have not translated into profitability as the company pumps cash into marketing and R&D.
In the quarter ended June 30, the company posted a net loss of $15.5 million, deeper than its $14.1 million loss in the year-ago quarter.
“I don’t like that they are losing cash, but if you wait for a cash flow positive tech company, you may have to wait for a full solar eclipse to come around again,” said Brian Hamilton, founder of data firm Sageworks.
Roku’s shareholders include Menlo Ventures, Fidelity and Rupert Murdoch’s Twenty-First Century Fox (FOXA.O).
The 15.67 million Class A share offering was priced at $14 per share, the upper end of Roku’s proposed $12 to $14 range, raising about $219.35 million in proceeds.
Reporting by Aparajita Saxena in Bengaluru and Liana B. Baker in San Francisco; editing by Patrick Graham, Sriraj Kalluvila and G Crosse