Why Roblox Stock Bounced 5% Today
Online gaming platform Roblox (NYSE: RBLX) is a hit with kid gamers, but with Wall Street -- not so much. Roblox stock was shocked yesterday when Barclays bank initiated coverage with an underweight rating (i.e., sell), sending the shares down more than 6% at one point. It quickly rallied, however, ending the day up. Today, Roblox's ride higher continued, and as of 12:12 p.m. ET on Wednesday, the shares were up 5.7%.
As for why, let's start with Barclays' criticism. According to the bank, Roblox games' core demographic are users aged 5 to 24. And in Europe and the U.S., where such gamers tend to spend more money per user on Robux virtual currency, Roblox has already acquired about 30% of this age group as customers.
Barclays thinks that this will cap how much more Roblox can grow within the lucrative European and American markets, before it must turn to less affluent regions of the world for user growth. And the analyst warns that this could imply "further potential downward revisions" in Roblox's forward growth.
Source Fool.com
