Stocks on Sale: Is Roblox a Buy Now?
It is simply a fact that the COVID-19 pandemic changed the world. When it comes to the stock market, "stay-at-home" names such as Zoom (NASDAQ: ZM), Teladoc (NYSE: TDOC), and Netflix (NASDAQ: NFLX) saw their stock prices soar as consumers rode out the pandemic from inside their homes.
Roblox (NYSE: RBLX), the maker of an online metaverse-style video game, saw its user base grow rapidly as children sought new ways to connect with friends. However, the company's share price came crashing back to Earth over the last year, dropping nearly 70% from its all-time high. So is Roblox down for the count, or is it a screaming buy? Let's have a closer look.
Roblox runs an online entertainment platform -- a virtual 3D world. It partners with independent creators who generate experiences that users then explore. For a child of the '80s like myself, it's like having a Nintendo (OTC: NTDOY) console with an endless supply of new (free) games. The downside to the bargain? Some experiences, being independently produced, have bugs or are otherwise underwhelming. Roblox generates revenue by selling Robux -- an in-game currency that gives users access to certain levels, skins, or items. The company then pays its creators about 25% of the Robux redeemed in the game.
Source Fool.com
