![]() ![]() The valuation is frothy, especially in light of the long-term track record of gritty, realistic gaming content. Longer term, I like the idea of a more-interactive and productive video game platform rather than participating in static content.Īt the same time, I think McCall is right. If you’re having a case of the FOMO (fear of missing out), you may want to place a modest bet on RBLX stock now. Believe me, he already is and probably worse. “Oh, but my Bobby will never play those kinds of games,” I hear some of you say. But let’s be real - if you think teens are going to stay permanently on family friend content, you’re delusional. Sure, on paper, it sounds great that Roblox is teen-and-tween friendly. Second, the company’s family-friendly platform may become a roadblock down the line. That makes me concerned that Roblox’s valuation is indeed frothy. Well, if McCall is saying to let RBLX stock cool off, this is “real” demand he’s referring to. And this implies that you don’t see the hype train associated with traditional IPOs to gin up interest. That is, no new shares are created, so tradable shares can only be derived from an existing pool. Therefore, it’s cheaper for the company going public.īut the drawback is that demand for a direct listing depends entirely on free market forces. Further, a direct listing doesn’t require the services of an underwriter. This has advantages over a traditional initial public offering because it avoids the usual pre-debut process. First, RBLX stock went public via a direct listing. I don’t necessarily disagree with his view. Even so, he’s suggesting that the valuation is frothy and that you should wait for a better price. Therefore, it’s understandable why many investors have been enthralled by RBLX stock. Primarily, it’s what I discussed above - the free-to-play app allows anyone to craft their own experiences and to share those with gamers around the world.įurther, McCall points out that top-line sales jumped in 2020 by 82% against the prior year to $923 million. So I wasn’t shocked when he stated that RBLX stock was underlined by cutting-edge innovations. Consider Headwinds Before Buying RBLX Stock It appears perfect for the target teens-and-tweens market but that’s also part of the problem. You’re not going to find any offensive gaming content nor does Roblox allow offensive speech. Take Your Profits! 7 Covid Winners to Sell Nowīetter yet, Roblox is family friendly. In that way, the possibilities are limitless. It allows developers to make their own games and share them with others. Roblox is distinct, perhaps unique among video game investments in that it’s a modular platform rather than a fixed system. That’s perhaps the biggest calling card for RBLX stock. Still, human nature is what it is - and that means people are going to look for new experiences. Admittedly, the pandemic might change this outlook somewhat. And the one that I’m happiest about, because I own shares, Sony (NYSE: SNE) soared 102%.īut the problem with consumers is that they’re fickle. Electronic Arts (NASDAQ: EA) is up 38%, while Activision Blizzard (NASDAQ: ATVI) is up 63%. You only need to look at the trailing-year performance of top video game stocks to understand the impact that the crisis had on the sector. With in-person entertainment options axed and the temporary cancellation of live events, this dynamic boosted the narrative of RBLX stock and related investments. According to Nielsen, “55% of people picked up video games - out of boredom, to escape the real world, to socialize - during the first phase of lockdowns.” If there’s any surprise to this statistic, it’s that the metric isn’t higher. Black and yellow stripe.Fundamentally, what’s exciting about Roblox is the underlying industry. 3D image Stock Photography by sanadesign 11 / 72 Road Closed Pictures by waynerd 6 / 110 Road Closed Barricade Stock Images by EyeMark 5 / 490 Perfection is Roadblock to Progress Barrier Barricade Sign Stock Image by iqoncept 12 / 161 Barrier isolated on white background. Roadblock Stock Photo by abluecup 7 / 194 roadblock isolated on white background Stock Photo by ekostsov 5 / 144 Closed road illustration design Picture by alexmillos 11 / 848 3d person watching a roadblock with a magnifying glass Stock Photography by kchungtw 4 / 132 Road under construction.
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