Roku Looks to Sell 1M Shares in Equity Sale

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The company estimated that it would sell the shares at just under $133 each, which would raise around $130 million.

The streaming video platform Roku is looking to raise well over $100 million in a sale of its Class A common stock.

The company has signed an Equity Distribution Agreement with Citigroup Global Markets to sell as many as a million shares in the company. The company estimated that it would sell the shares at just under $133 each, which would raise around $130 million. The stock was trading at $160.12 at the close of trading Monday. On Tuesday the share price dropped by as much as 5 percent in response to the news.

Roku wrote in a filing with the Securities and Exchange Commission that it will use the proceeds from the sale for “sales and marketing activities, research and development activities, general and administrative matters, repayment of debt, other business opportunities and capital expenditures.” It may also use the funds on acquisitions or investments, though it adds that it has no current commitments in that regard.

Citigroup will be entitled to a commission of up to 2 percent of the gross proceeds from the sale.

The sale comes as Roku continues to grow rapidly as consumers shift their video viewing to streaming devices. Earlier this month the company reported that it had 32 million active users, and last month the company agreed to acquire the video advertising platform Dataxu in a deal worth around $150 million. The acquisition closed earlier this month.

While Roku’s original business was focused on selling streaming boxes and sticks that hook up to TV sets, it now strikes deals with TV set makers to include its software in many TV sets out of the box. It is also selling its streaming hardware at a discount to grow its user base in order to expand its advertising business.