Media streaming startup Roku gave viewers a show Thursday when it popped nearly 70 percent — a 2017 record — in its public market debut, injecting confidence into an IPO market disappointed by two recent high-profile flops.
Shares of Los Gatos-based Roku, a pioneer in the cord-cutting movement to wean viewers from subscription cable, were trading at $23.50 when the market closed Thursday. That was up 68 percent from the $14 price the company set in its initial public offering the day before.
It was the biggest first-day bump from a U.S.-based company this year, according to Renaissance Capital, which manages IPO-focused exchange-traded funds.
That’s good news for analysts and investors who had hoped to see a flood of tech IPOs this year but so far have witnessed a trickle. Adding to the gloom, two of 2017’s most anticipated tech offerings — Snapchat parent Snap and meal kit delivery company Blue Apron — plunged after lackluster earnings reports.
And then came Roku.
“People are dancing on rooftops in Silicon Valley over Roku,” said Los Angeles-based tech investor Eric Schiffer, CEO of private equity firm The Patriarch Organization. Roku has succeeded in making IPOs sexy again, he said.
Once the first-day buzz wears off, there’s no guarantee Roku won’t fizzle the way Venice-based Snap did, Schiffer said. After popping 44 percent in its much-anticipated public offering in March, Snap shares on Thursday were down 15 percent from their IPO price. But Roku, with its high-quality, well-established products, has a better chance of bouncing back from a downturn, Schiffer said.
New York-based meal kit delivery company Blue Apron was another much-hyped IPO that ended up letting down investors. The company’s share price flatlined during its first day on the public market, and on Thursday was trading at barely more than half its IPO price.
Roku raised $219 million in its IPO late Wednesday, pricing 15.7 million shares at $14 — the high end of the $12-$14 target range the company set last week. The company started trading at $15.76…