Show an ad over header. AMP

Gaming platform Roblox, fintech Affirm set to delay IPOs in blow to 2020's unicorn stampede

The 2020 unicorn IPO stampede has hit a speedbump, with gaming platform Roblox postponing its IPO until early 2021, and fintech Affirm likely to do the same.

What to know: Neither delay reflects soft investor interest or other concerns about the underlying businesses. Instead, they're about broader IPO market issues.

Inside Roblox: The company had planned to include a large secondary slug for employees, per sources familiar with the process.

  • Then Roblox saw the massive first-day pops for Airbnb and DoorDash — despite both companies using share price matching systems from Morgan Stanley and Goldman Sachs, respectively — and got worried that its own people would feel shortchanged.
  • The board voted Friday to delay and the company is now working to redesign the offering, possibly by cutting down the secondary size and unlocking a percentage of vested employee shares.
  • Roblox CEO Dave Baszucki shared the news with employees via email, writing in part: "We've seen companies take innovative approaches to creating a more market-based relationship between investors and companies. Based on everything we have learned to date, we feel there is an opportunity to improve our specific process for employees, shareholders and future investors both big and small."
  • To be sure, the move is unlikely to thrill all "Robloxians," particularly any of those banking on pre-holiday liquidity.

Inside Affirm: As of yesterday the company was still hoping to IPO in 2020, by launching the roadshow today, getting the book covered by a few deep pockets and pricing next Monday night. But that hasn't happened as of this writing, and it's a tight timing needle to thread.

  • Affirm is also frustrated by the "pop" issue, but sources place most of the delay blame on the SEC — claiming it's been difficult to get prompt responses.
  • This is an issue that bankers have grumbled about for weeks, seemingly driven by the flood of registration documents, but it didn't seem to cause timing problems for anyone else (including Wish, which filed for its IPO two days after Affirm, but still plans to price this week.
  • One variable might have been Affirm's recent move to buy PayBright for C$340 million. The deal was announced via press release on Dec. 3, but not referenced in a publicly-available SEC filing until earlier this morning.

Between the lines: Both Roblox and Affirm still plan to go public soon, although it's not yet clear how the first-day pop issue will be resolved.

  • Those new "hybrid" systems, first used for the Unity Software IPO, have failed to stem pricing volatility, which was their primary purpose.
  • There's just a massive delta right now between what large institutional investors and retail investors will pay for growth, and new issues do need some sort of active float (whether that be to private banking clients, Robinhood, or someone else).
  • No company wants to miss out on the entire pop, but the bigger fear is trading down below the IPO price when lockups expire.

The bottom line: No one has cracked the bull market IPO code.

Capitol review panel recommends boosting security with more police, mobile fencing

A panel appointed by Congress to review security measures at the Capitol is recommending several changes, including mobile fencing and a bigger Capitol police force, to safeguard the area after a riotous mob breached the building on Jan 6.

Why it matters: Law enforcement officials have warned there could be new plots to attack the area and target lawmakers, including during a speech President Biden is expected to give to a joint session of Congress.

Keep reading... Show less

Financial fallout from the Texas deep freeze

Texas has thawed out after an Arctic freeze last month threw the state into a power crisis. But the financial turmoil from power grid shock is just starting to take shape.

Why it matters: In total, electricity companies are billions of dollars short on the post-storm payments they now owe to the state's grid operator. There's no clear path for how they will pay — something being watched closely across the country as extreme weather events become more common.

Keep reading... Show less

Chamber of Commerce decides against widespread political ban following Capitol insurrection

The U.S. Chamber of Commerce revealed Friday it won't withhold political donations from lawmakers who simply voted against certifying the presidential election results and instead decide on a case-by-case basis.

Why it matters: The Chamber is the marquee entity representing businesses and their interests in Washington. Its memo, obtained exclusively by Axios, could set the tone for businesses debating how to handle their candidate and PAC spending following the Jan. 6 Capitol attack.

Keep reading... Show less

Scoop: CDC lets child migrant shelters fill to 100% despite COVID concern

The Centers for Disease Control is allowing shelters handling child migrants who cross the U.S.-Mexico border to expand to full capacity, abandoning a requirement they stay near 50% to inhibit the spread of the coronavirus, Axios has learned.

Why it matters: The fact the country's premier health advisory agency is permitting a change in COVID-19 protocols indicates the scale of the immigration crisis. A draft memo obtained by Axios conceded "facilities should plan for and expect to have COVID-19 cases."

Keep reading... Show less

8 Senate Democrats vote against adding $15 minimum wage amendment to COVID relief

Eight Democratic senators on Friday voted against Sen. Bernie Sanders' amendment to ignore a ruling by the Senate parliamentarian and add a $15 minimum wage provision to the $1.9 trillion COVID relief package.

The state of play: The vote was held open for hours on Friday afternoon — even after every senator had voted — due to a standoff in negotiations over the next amendments that the Senate is set to take up.

Keep reading... Show less

CDC: Easing mask mandates, re-opening restaurants led to higher COVID cases, deaths

Easing mask restrictions and on-site dining have increased COVID-19 cases and deaths, according to a study out Friday from the Centers for Disease Control and Prevention.

Why it matters: The report's findings converge with actions from governors this week easing mask mandates and announcing plans to reopen nonessential businesses like restaurants.

Keep reading... Show less

Exclusive: GOP Leader McCarthy asks to meet with Biden about the border

House Minority Leader Kevin McCarthy (R-Calif.) has requested a meeting with President Biden to discuss the rising numbers of unaccompanied migrant children at the U.S.-Mexico border, in a letter sent on Friday.

Why it matters: Biden is facing criticism from the right and the left as agency actions and media reports reveal spiking numbers of migrant children overwhelming parts of the U.S. immigration system. Recent data shows an average of 321 kids being referred to migrant shelters each day, as Axios reported.

Keep reading... Show less

Public desire for vaccine increases to 69%, but with partisan divide

69% of the public intends to get a COVID vaccine or already has, up significantly from 60% in November, according to a report out Friday from the Pew Research Center.

Yes, but: The issue has become even more partisan, with 56% of Republicans who say they want or have already received a coronavirus vaccine compared to 83% of Democrats.

Keep reading... Show less



Get Goodhumans in your inbox

Most Read

More Stories