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Roblox investors are closely monitoring the coronavirus vaccine development as it will significantly affect the company’s gains.
Roblox Corp (NYSE: RBLX) stock closed Thursday trading at $73.90, up 6.33%. The American video game developer went public through a direct listing earlier this week. The spike experienced yesterday coincided with news that Cathie Wood’s Ark Invest purchased more than 500,000 shares of the stock for her Ark Next Generation Internet ETF on Wednesday.
Notably, a vote of confidence from Wood has often moved single securities after the hot-handed investor returned 150% in her flagship fund in 2020. However, Ark’s ETFs have been under pressure in recent weeks.
According to metrics provided by MarketWatch, Roblox has a market valuation of approximately $38.36 billion. There are 493.35 million outstanding Roblox shares after the direct listing. Roblox stock climbed over 50% on Wednesday after the company went public.
Roblox (RBLX) Stock in Regards to the Company’s Market Fundamentals
As a successful video game company, Roblox has significantly benefited from the ongoing coronavirus pandemic stay-at-home order. The company reported high daily active users at the height of the coronavirus pandemic. Whereby it reported having 32.6 million active users at the end of 2020. The figure reciprocated to approximately 85% rise from last year’s.
Roblox reported a revenue jump of approximately 82% to $924 million in 2020. Besides, the company recorded a net loss of $253 million, vs. a $71 million net loss in the prior year.
Roblox investors are closely monitoring the coronavirus vaccine development as it will significantly affect the company’s gains. Notably, as people return to their working space and normalcy, less time will be spent on the gaming app.
Besides, there is huge competition in the entertainment industry. Moreover, the demand is expected to level down in the coming quarters as more people get vaccinated for the coronavirus.
According to Roblox IPO prospectus, bookings grew 39% from $499.0 million in 2018 to $694.3 million in 2019 and grew 171%, to approximately $1.9 billion, in 2020. In addition, the net cash provided by operating activities was $101.0 million, $99.2 million, and $524.3 million in 2018, 2019, and 2020 respectively.
As for the free cash flow, Roblox reported $35.0 million, $14.5 million, and $411.2 million in 2018, 2019, and 2020, respectively.
One of the most unique aspects of the Roblox app is the fact that users can create their games on the platform. As a result, developers are compensated 30% of the proceeds from the games. This not only attracts quality developers but also attracts more gamers who are willing to experiment with different games.
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