Anthony Wood, founder and chief executive officer of Roku Inc.

David Paul Morris | Bloomberg | Getty Images

Anthony Wood, founder and chief executive officer of Roku Inc.

Roku is poised to test the public markets, but it first has a big question to answer: Why should investors be excited?

Consumer devices have been a sinkhole for public investors of late. GoPro, the adventure camera company, has plunged 38 percent in the past year and is trading 63 percent below its IPO price from 2014. Fitbit has performed even worse, with shares of the fitness tracker down 61 percent in the past 12 months, and 71 percent below its 2015 debut price.

Roku faces very similar challenges. The company, which makes devices for streaming TV shows and movies, is in direct competition with the biggest consumer device companies — which also happen to be the most valuable businesses in the world.

Those brands have much greater brand recognition and marketing budgets that are many times bigger than Roku’s. According to Roku’s own admission in an IPO prospectus filed Friday afternoon, the company has to fight for shelf space in retail stores.

“Competition is intense for these resources, and a competitor with more extensive product lines and stronger brand identity, such as Apple or Google, possesses greater bargaining power with retailers,” Roku said in the filing.

“In addition, one of our online retailers, Amazon.com, sells its own competitive TV streaming products and is able to market and promote these products more prominently on its website, and could refuse to offer our devices,” the company added.

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