Roblox: Take It Private

Roblox is currently positioned as an ideal candidate for a take-private transaction due to its struggle with public market volatility, depressed valuation, and the need for long-term strategic investment. Despite generating $1.35 billion in free cash flow in 2025, the company has faced significant stock price declines following guidance revisions and a shift in market sentiment. Transitioning to a private structure would allow the company to prioritize long-term growth initiatives—such as expanding into new international markets and scaling creator tools—without the pressure of quarterly earnings cycles.

Financial modeling suggests that a take-private deal at $65 per share, representing a 31% premium over recent trading prices, could yield a 23.5% internal rate of return for private equity sponsors. The proposed transaction would involve a consortium of sponsors, the utilization of existing cash reserves, and a modest debt load, with founder David Baszucki rolling his significant stake into the new entity. This structure mirrors successful historical precedents, such as the take-private paths of HCA, Kinder Morgan, and Dell, where companies were delisted to undergo restructuring before eventually returning to public markets.

The feasibility of this move rests on the assumption of 20% year-over-year bookings growth over a five-year hold period. While the company faces headwinds, including the necessity of a large equity check and ongoing child-safety litigation, the founder’s controlling interest simplifies the potential for a deal. By moving away from public scrutiny, the company could reset its valuation and focus on sustainable, long-term value creation, ultimately relisting at a more favorable enterprise value-to-bookings multiple.