Recently, Roblox’s video game stock jumped up after exceeding analysts’ expectations. But what are these incredible statistics? And more importantly, are investors becoming too hopeful, too quickly?
Roblox is an online video game platform that allows users to play and create games, as well as interact with other players.
The platform is free to play and is popular with younger gamers. Of course, there are in-game purchases available…
On May 10, 2023, Roblox officially reported its first-quarter performance.
ON THE HEELS OF THE REPORT, THE VIDEO GAME STOCK ROSE ABOUT 6%.
We are going to review what Roblox attributed this growth to, and its long-term impact…
More Video Game Players = Stock Leveling Up
The main contributor to this video game stock going up is the impressive increase in daily active users and engagement hours.
- 66 million daily active users — 22% annual growth.
- 14.5 BILLION engagement hours — 23% more than this time last year.
BOTH OF THESE STATISTICS ARE ALL-TIME HIGHS FOR THE GAMING PLATFORM!
Naturally, numbers like that got analysts and investors alike excited about the video game stock.
Founder and CEO of Roblox, David Baszucki, said this about its usage surge.
“EIGHT QUARTERS OF INNOVATION AND AWESOME ENGINEERING… AND WHILE USERS OF ALL AGES ARE ALSO GROWING, OLDER USERS CONTINUE TO CONTRIBUTE THE MOST, WITH THOSE BETWEEN THE AGES OF 17-24 GROWING BY 35% IN Q1 2023 OVER Q1 2022.”
Now before you rush into buying shares in Roblox, there is something you need to know…
Roblox — A Loss is Still a LOSS
Despite its continued popularity, Roblox also continues to lose money!
Yes, the company had a net loss of $268 million for the first quarter of 2023, as opposed to only $160.2 million in Q1 of 2022.
Therefore, the Roblox video game stock increase may be a red herring.
Only time will tell. Just do your due diligence and remember Warren Buffett’s #1 Rule for Investing…
Never lose money.
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