Roku - Looks Expensive, Dangerous Short

Roku's IPO has been a huge success.
Following the great returns, expectations have risen too much for me, especially as the valuation requires more growth.
As I fear about the business in the very long run and take notice of the high multiples, Roku remains an easy avoid, but dangerous short.
This idea was discussed in more depth with members of my private investing community, Value In Corporate Events.
Roku  aims to be the TV streaming platform which connects the entire TV ecosystem as pioneers of streaming to the TV. Investors seem to agree and love the dominant positioning of the business in an emerging OTT market, while shares were offered at the high end of the preliminary offering range at $14. Shares jumped to levels as high as $23-24 following the IPO, in what can easily be called a major success.
Following this success, expectations have been on the increase, as I am cautious given the uncertainty about the long-term business model and further growth required to create reasonable valuation multiples.

The Business

Roku enables consumers to stream the content they love on a single platform in a convenient way on their own TV. The company has over 15.1 million active accounts, and those people use the service at mass, with more than 6.7 billion hours being streamed in the first half of the year. That is over 440 hours for each account, or nearly 2.5 hours every day.
When consumers use Roku to stream content on their TV, they have more options to watch and control over their expenditures on content. Consumers can browse through endless numbers of movies, episodes, but also live sport and music events, as they can compare the costs from various content providers in an easy manner. Besides streaming Netflix (NASDAQ:NFLX), Hulu, HBO, consumers can opt for news or sport channels as well, with the wide choice being a major advantage. Content providers still stand to gain if they offer free content through Roku, being able to include advertising in those programs. Additionally, some content providers are arguably too small to offer their own subscription services.
https://www.servicedonline.com/

The benefits for consumers are obvious, being able to reach much greater assortment of content in a simple overview. Content providers benefit from a large audience, as well as monetization opportunities tailored to their desires. Social and technological trends are clearly benefiting the company as the over-the-top market is growing amidst cord-cutting, and young households not getting cable altogether.
source : https://seekingalpha.com/article/4110761-roku-looks-expensive-dangerous-short

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