NASDAQ IPO: Roku's SEC filing may hint something about its corporate strategy

Roku, the digital media player maker, is about to go public this week. The company has just filed its initial public offering (IPO) for its debut on the Nasdaq stock market.

According to TechCrunch, Roku has just filed its S-1 paper with the US Securities and Exchange Commission (SEC) this week. The company will be listed on NASDAQ under the ticker “ROKU.” However, the company has not shared any details about how many shares it plans to sell on NASDAQ.

Roku also did not specify the price of the shares.

But according to an earlier Wall Street Journal reports, the company was seeking an IPO valuation of roughly around $1 billion. But Roku remained tight-lipped about this valuation story.

A close look at the company

Founded in 2002 and based in Los Gatos, California, Roku manufactures and sells home digital media devices that allow consumers to stream Netflix, Youtube and streaming video services to their home TVs. The company has pioneered the streaming business for TV. The company’s digital media players allow consumers to access the internet-streamed video or audio services through their TVs, including subscription-based services.

The company licenses its core digital media product, including its proprietary software, to other companies.

The company’s digital streaming products are set-top boxes for the delivery of over-the-top-contents, which is provided by the company’s partners. Roku streaming media player supports both on-demand and live streaming contents. It also supports Apple HLS (HTTP live streaming) adaptive streaming technology, which is used for live TV streaming. Additionally, the device also supports free and paid channels, which include Amazon Video, Hulu Plus, and Netflix.

Roku has also received some venture financing in the past years. In May 2013, it raised $60 million in its Series F funding round led by Fidelity Investments.

Then in October 2014, it raised an additional $25 million from its Series G funding round led by Fidelity Investments. In November 2015, Roku received $45.5 million in venture capital from its Series H funding round. News Corp. led this round, and its Roku’s last funding round before its planned IPO, according to CrunchBase.

The company’s investors include Anthony Wood, Fidelity Investments, Fox Networks Group, Globespan Capital Partners, Good Technology, Hearst Ventures, Luminari Capital, Menlo Ventures, Netflix, News Corp., Sky, and Viacom. Roku is currently the industry’s number one streaming device in terms of total hours streamed.

Roku’s SEC filing may hint something about it corporate strategy

As mentioned earlier by TechCrunch, the company’s S-1 document filing details the company’s financial performance and corporate strategy. The SEC filing also indicates that Roku intends to raise up to $100 million in fresh capital on its NASDAQ debut. But some analysts said that the number is just a placeholder and is expected to change as the IPO draws closer.

The company plans to set-up a dual-class stock structure, which Business Insider said will provide more power to pre-IPO than new ones. This will make it easier for existing Roku’s shareholders to retain control after the IPO. Using the dual-class stock structure model, current Roku’s investors will get a new class of stock that will give them 10 votes for every share they own, while shares sold in IPO will only give investors one vote per share, the Business Insider reported.

This model is no longer new in the tech world. Search giant Google and Facebook have already used this stock structure. However, there‘s some concerns about this practice.