SHARES in video game platform Roblox built on yesterday’s blockbuster market debut to hit almost double the launch price today as an influential stock-picker bought 500,000 shares.

The Silicon Valley-based company’s stock hit $77.55 shortly after trading opened on Wall Street - it had been priced before launching just 24 hours earlier at $42.

The second wave of investor excitement lifted the value of the tranche of Class B ‘golden’ shares retained by founder David Baszucki - aka "builderman" - to more than $4.6 billion.

It was turbo-boosted after Cathie Wood’s ARK Next Generation Internet exchange-traded fund (ETF) said it had bought more than half a million shares.

The news sealed Roblox’s record as the strongest opening ever for a direct stock market listing.

John Patrick Lee, ETF Product Manager at VanEck, told Reuters: "Roblox’s blockbuster debut mirrors other gaming and tech IPOs that have gone live in the last six months, with high levels of demand on the secondary market after the company lists.”

Wood, a long-time Tesla bull, has a massive online following and is a popular topic of discussion among the social-media savvy herd of small-time traders on the Reddit forums who regularly turn to Roblox to create memes and viral videos to accompany their ‘to the moon’ share tips.

Analysts expect shares to trade with high volatility “for some period of time” due to the high level of retail interest.

Roblox chose to go public by selling shares directly to the public market (DPO), rather than a more traditional initial public offering (IPO).

It means no shares were sold in advance of the debut and the company itself did not raise any capital directly from the launch.

Instead current investors were simply able to begin selling shares at the reference price calculated in advance by financial advisors.

Some 199 million Class A shares, carrying one vote each, came onto the market.

The separate Class B stock, which comes with 20 votes per share, is entirely held by Baszucki, ensuring 70% of the voting rights stay under his control.

The DPO path is growing in popularity among tech firms - used by Spotify in 2018 and Slack in 2019 - wary of criticism that investment banks underwriting flotations deliberately underprice them to create a first-day “pop” for their institutional investor clients.

The move only further stoked a frenzy of anticipation among armchair investors whose co-ordinated buys have sent other favoured stocks into the stratosphere in recent weeks.

A world trapped in blockdown

Roblox has been a source of digital distraction for millions of children around the world as video games demand surged through the pandemic. Around half of British 10-year-olds have an account, according to its own data.

The platform provides access to relatively sophisticated 3D software tools which have been used by its army of 8 million amateur developers to create upwards of 20million online multiplayer games.

While games are free to play the company makes money by issuing Robux, which its 37 million daily players buy with real dollars to spend on avatars, membership upgrades and accessories with in-app purchases.

The real-world cash is split between the company and the community of developers, who between them earned $300m last year.

To the moon

The user-generated-content model has seen the firm enjoy a dizzying ascent in its own value in the past year. A fundraising round in April saw it valued at $4billion. In a follow-up raise in January, it was up to $29.5billion.

Nevertheless, the platform made a net loss of almost $200m in the first nine months of 2020 as it invested in expansion. Questions remain among investors about whether it can sustain that level of growth as the world emerges from lockdown, and the kids go back to school.

The launch had been delayed from December as the way it classes revenue was scrutinised by the US Securities and Exchange Commission.

It remains undoubtedly popular among the social-media savvy investors of Reddit and similar platforms, who retool the cartoon-style animations as they exchange trading tips and they plot which stocks to send ‘to the moon’ with co-ordinated buys.

GameStop, the original ‘meme stock’ which rocketed from $20 to more than $480 in January on the back of this trading frenzy, held onto most of its gains from a repeat ascent today. After a sell-off crash through February it has been rebuilding in past days and is now around $260.

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