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DD: Upcoming Roblox $RBLX IPO Next Week (March 10th, 2021)

DD: Upcoming Roblox $RBLX IPO Next Week (March 10th, 2021)

Not_on_a_log

That’s some very risky risk factors. The fact that they can’t generate a profit with this many supposed users is a huge red flag


BuffettsBrokeBro

This. Also, if it couldn’t do it during the last year when people, and particularly kids, had literally nothing else to do; how is it going to fare when the world opens back up?


Tiny_Bid7042

I'm a middle school teacher and I play Minecraft and rob lox with kids as part of our after school "remote clubs". I will tell you, my kids are never going out again- even when we open back. Many prefer to live in the virtual worlds that Minecraft and Roblox offer. These games are in depth and are not going anywhere. I can't tell you if Roblox is a phase, but these types of games are the future. My students were on rob lox, Minecraft, and discord well before the pandemic started.


BuffettsBrokeBro

I don’t doubt that these games remain popular with kids. I do doubt Roblox’s ability to actually turn a profit


Tiny_Bid7042

Kids used to wear cool sneakers for clout, now it’s skins. $5 a month ain’t bad and even economically disadvantaged people may be able to pay it. 150 million users! My students like it because they can make their own games so the possibilities are endless. Kids used to want to be professional athletes now they want to be influencers or play video games professionally.


BuffettsBrokeBro

Is an argument for the profitability of games geared towards kids. Which, as I’ve said, I don’t doubt. Why do you think this company, specifically, will turn a profit when they haven’t thus far? What do they have in the pipeline that would enable them to effectively monetise the user base, given they’ve thus far not managed to do so to the point that they’re turning profit?


ultimatefighting

It sounds like youre talking to the CEO of Roblox, not a teacher.


BuffettsBrokeBro

No, it doesn’t. If you’ve got a position in, and are talking up, a stock; you should have an idea of how it’ll be profitable. Just going in because “kids love it” isn’t good DD.


ultimatefighting

What I meant to say was it sounds like youre talking to someone who will benefit from the stock price going up, giving you little justification other than shady anecdotal.


Tiny_Bid7042

I think my DD is perfectly acceptable. My anecdotal was more about how the argument of “when the pandemic is over kids are going back out” and they are not! I don’t know about profits - I’m just giving you my first hand observations as someone who is around the consumer of these games. That’s DD too!


BuffettsBrokeBro

It is absolute not DD to claim kids will not be going back outside in greater numbers when lockdown restrictions end.


AnyRandomRedditor

Same way YouTube did. Change the monetization structure. Currently it’s 30% to developers. That’s way too high and they’re flooded with millions of crappy experiences. Change it to 20%, you’ll pay out less, and you’ll start getting only good content creators out there, as the lazy ones won’t see it worth the time and effort.


Tiny_Bid7042

Riblix isn’t just a game. You can get paid when people play your games. You become a game designer. You make content. You can’t compare this to a video game. The average user is younger than 13 he or she will be a pro in a few years and in ten will be able to make a career out of it. Alot of companies are not profitable in the beginning.


WillusMollusc

>Alot of companies are not profitable in the beginning. Roblox is 14 years old.


Tiny_Bid7042

And it is profitable so far, no?


WillusMollusc

...no?


Not_FinancialAdvice

No. Directly from their S1 filing: https://www.sec.gov/Archives/edgar/data/1315098/000119312521038726/d87104ds1a.htm#rom87104_10 (Consolidated net loss, paraphrasing to whole numbers!) 2018: 88MM loss on 324MM revenue 2019: 71MM loss on 508MM revenue 9 months ending Sep 30, 2020: 197MM loss on 613MM revenue for comparison; 9 months ending Sep 30, 2019: 38MM loss on 360MM revenue Not a financial advisor/not financial advice.


talkin_shlt

idk i played roblox as a kid and i remebered it'd be exceedingly shitty, lots of games iare pay to win because the creators want your robux but at the same time there was some good games on there that had no pay to win aspect. I felt like they handled the site very shitily though and gave close to 0 support to the game creators. Updates would actually break any games that werent updated over time so the old games would fall into disarray. Imo would i buy this at 10b evaluation maybe but at 40 hell no


FuzzyBacon

I remember deleting affiliate links for Roblox almost 12 years ago on internet forums. Used to annoy the piss out of me. I don't think the company is going anywhere but I'm not planning on investing - if they haven't turned a profit by now I don't see how that changes.


chufenschmirtz

I just asked two of my children about Roblox who are very into online gaming including one who has been a Minecraft fanatic. “Not at all cool, dad. it’s for little kids,” and “I’d rather watch paint dry.” I’ll be sitting this one out. Perhaps it’s like Fortnight which was the shit for about a year and a half then became really really uncool (to my kids and their friends at least) when every kid over 3 would be standing in line at every store or on the megatron at sporting events doing some fortnight dance. “It’s cringe dad.” - just a dad perspective - one who eats crayons


BuffettsBrokeBro

I think this is one of the key points for me - kids get bored and move on. That doesn’t mean gaming platforms can’t turn real profit, or that franchises like Fortnite don’t keep a loyal following (continuing to spend money); it just means it’s difficult to get a true moat - even for the biggest companies within gaming for adults like TakeTwo, Activision Blizzard etc. I accept there’s innovation in this on the game development side that maybe sets it apart, or at least gives it an edge, but I still see it like various crazes. Pokemon is still huge, but it’s not like it was in the 90s (it’s also owned by Nintendo, who operate successfully across multiple industry verticals). For a reasonable price, this would be one to watch. But the lack of profitability and the sheer scale of the valuation make it hard to believe any upwards trajectory will last beyond listing hype.


chufenschmirtz

Totally agree. I’m still new. Half the things that look stellar to me seem to lose value the moment that buy and this seems too dependent on 9 year old attention spans. And that whole revenue thing


CLYDEFR000G

I am 27 and an avid gamer. I too think this hype is just like fortnite. I too was huge into fortnite on release but it has died down considerably. Roblox is a very wonky hollow shell of a game. Yes you can make games so the possibilities are “endless” but the games are trash or rip offs of other popular titles that have many more technical glitches than the real games they are copying. I think currently roblox is doing well because fortnite has been on the decline in recent years (I gave up playing the game too many bad changes and a ever growing skilled player base) Currently in the gaming world there is over saturation. Every game is the next big battle Royale and no one is coming out with new ideas. But believe me, when a new game comes out worthy of the hype around it like the beginning of fortnite and how it exploded, the games like roblox will be in the past


tlighta

I think the major issue will probably just be when shorts start trying to break the platform. So its probably good for a run up after IPO, but then there will be a better time to buy as shorts flood the games with harassing bots, etc.


BuffettsBrokeBro

Sorry... just to be clear: you think Wall Street shorting Roblox will extend to some elaborate conspiracy to deploy bots into the games and harass people?


tlighta

Elaborate conspiracy? No. Nothing I said suggested any need for secret coordination.


BuffettsBrokeBro

Just a straightforward conspiracy? Right. Seems likely...


tlighta

As a note, I don't think its actually a bad thing if shorts try to break the platform. I consider that the same as consumer reports thoroughly drive testing a car. Platforms should be able to handle attacks and some can.


Barkasia

My guy, shorting happens when someone thinks a stock is overvalued. Its not some deathnote hedge funds use to assassinate companies they decide to take out in their secret cabal meetings.


tlighta

Sure, that is correct.


S_T_Nosmot

Hol up. How can you come into something you know nothing about and then spout nonsense. Get called out for it and still just choose to believe the nonsense.


Vassap

What are you even talking about. Take your meds...


DiligentDaughter

You know what? Quit fucking saying that. *I* take meds for mental illness. It's not a god damned insult to need to take medication. Idiots who are afraid of what they don't understand, don't need medication, they need education.


tlighta

A harassing attack against my argument certainly disproves it.


Vassap

It’s not an argument. You’re baselessly claiming that shorts will deploy bots on roblox to annoy users. Oh and that will somehow test/prove the resilience of the platform. It’s a paper thin and weird theory.


burttom1

It seems like a low cost way to make the short more likely to be profitable. Cramer told us they manipulate public sentiment. Doesn’t seem that far fetched


JeffersonsHat

Them losing almost 200 million on covid year is incredibly bad.


StoryBasedRBLX

Creative accounting and ASC 606. They don’t report their 1.2b in bookings (robux sales) as revenue. They’re actually strongly cash flow positive despite having an operating net loss of 200m.


bigtunacan

Nobody on this forum ever appears to understand that cash flow is more important than taking profits, especially when a business is still in the growth phase. They just say, "Look it hasn't turned a profit yet; this is bad investment." People on this very same forum were saying the same thing about Amazon back in 2013 when it was sitting around $300 a share.


Ihavebeenhackedlilil

finally a voice of reason <3 is it GARP quality tho?


mannymoes2k

I spend a fortune on v bucks for my son. You’re telling me all those real bucks I’m turning into vbucks and this thing still isn’t ridiculously profitable? Lol


xyyxyyyzzy

Wrong company


Mastermind530974

> v bucks Thats Fortnite not Roblox


Not_on_a_log

Apparently not


skilliard7

Their primary demographic is children. Children don't exactly have access to a ton of money.


Zylonite134

Fortnite says otherwise. Also look up genshin impact profit


skilliard7

I wouldn't say Genshin Impact's primary demographic is children. Lots of adults dumping thousands of dollars on the game, can't say the same about Roblox.


OddPhilosopher496

Yeah, and Genshin Impact is far more sophisticated than this. The fact that they designed their game in a way that keeps you engaged without binging is what baffles me. I've never seen it done before. You want to damn gamble in that game.


ArdenSix

Fortnite's audience is significantly older though. Sure those highschool kids may not have jobs yet but that doesn't mean they aren't earning money from chores/mowing lawns/etc. Those 4 yr olds playing Roblox can't do that and are 100% reliant on their parents discretion for in game spending.


CarCaste

​ yes they do, their parent's money


Not_FinancialAdvice

The nonstop hype around this IPO worries me quite a bit as a potential investment. It's everywhere; stories everywhere by parents how their kids are seemingly addicted to it. It's a little nuts. Not a financial advisor/not financial advice.


meat-vehicle

I agree. Talking to my Niece who was addicted to it last year, she tells me that its SO LAST YEAR.


WhyAreUtheWayThatUR

All 3 of my kids have played it continuously for the last 5 years and still love it. So do all their friends.


XavierYourSavior

Who says “so last year” anymore


Wade707

Lmao how is what you said in any shape or form a negative? (Position in company zero)


Not_FinancialAdvice

Because the hype implies that it's going to end up with a bloated valuation. I've been investing since the .com bubble, and I've developed something of an aversion to hype (especially in a frothy market) as a result. I'm interested at *maybe* $50ish, but given the frothy environment (even after this draw down) I don't think it looks like that's going to be a thing. Not a financial advisor/not financial advice.


Storage-Terrible

You’ve been investing this long and haven’t learned to buy the hype, sell the news? I agree with you: this is going to explode out of the gates and fall very very quickly; leaving a lot of crying bag holders.


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FuzzyBacon

Definitely don't buy the dip, at least.


Not_FinancialAdvice

Frankly, I haven't been the kind of investor to do that for a long time now. Lots of people do, and I'm sure quite a few people make out well doing so, but I'm frankly not going to be glued to my phone constantly trying to avoid the proverbial cliff. Not a financial advisor/not financial advice.


Wade707

Thats what I was thinking. Day trading is a thing.


AneriphtoKubos

If I was an idiot on WSB, I’d naked call it to the end of the day at 50 dollars.


aygc271

God knows it'll fly to a half a trillion dollar valuation for no reason. I really don't understand that game. My nephew loves it but on the surface it's the worst looking game I've ever seen and doesn't play much better. I've been bored senseless playing it with him a number of times. I've noticed his generation is in to very low fi games. I was Mr AAA titles when I was his age.


thekoreanbeaver

I don't want to be pedantic here, but it seems to me that this is important enough to be highlighted - Roblox is not a game, it's a platform. In terms of investment, that makes a huge difference.


Boston_Bruins37

> that makes a huge difference. not really, especially when they cant make a profit


FuzzyBacon

I'd argue if still makes a huge difference because the steps they'd need to take to become profitable are different for a game vs a platform. They have control of different levers in the user experience. I'm bearish on Roblox but I think the point remains valid.


Peepee_poopoo-Man

It's a platform, and yes everything looks as it does because it has to stylistically look as it does lol. There's a lot of trash on the website, but also a lot of well-developed labours of love. If he's young, he's most likely playing the trash.


Not_FinancialAdvice

> God knows it'll fly to a half a trillion dollar valuation for no reason. The valuation and my ability to get it at an attractive price is what concerns me. I wouldn't be surprised if this sees a big push on day one (due to the hype), so chances are that getting in relatively cheap isn't going to be possible. >I really don't understand that game. My nephew loves it but on the surface it's the worst looking game I've ever seen and doesn't play much better. I've been bored senseless playing it with him a number of times. I've noticed his generation is in to very low fi games Philosophically, I think this is kind of a positive. Low-fi means that it runs on all kinds of hardware, which makes gaming more democratic and emphasizes gameplay and community. From an investment perspective, it broadens their customer reach: you no longer need a $1500+ gaming rig (or $1000 phone) to run it well. Not a financial advisor/not financial advice.


Ouiju

That's pretty common in S1s. Still a risk but it's not unique. Every company says that.


DelightfulDonald

And after this many years?


Chroko

It doesn't look like they're really trying to make a profit at the moment. Look at how much they're spending on growth and their aggressive expansion into foreign markets.


CTiger17

https://www.statista.com/statistics/1190638/annual-revenue-roblox-corporation/ Roblox rev is up YOY


Effective-Pay-5043

I've bought robux for my daughter several times. That's what she wants. Parents will spend money if their kids are into something. It's insanely popular. I want to buy this company. My problem is this... how do companies get this big without making any money. If I don't make money things get bad for me. They have a subscription service which seem to be hot for a high stock price. I may regret it but I'm not buying much if any.


Financial_Fraud

I always wondered why I saw Ryan's Toy Reviews brand everywhere until a friend of mine told me it's all his kids wants or watches, instantly made sense.


hambon99

I'm sure it will be the next big short term meme stock. Getting pumped into infinity in the first week.


millerlit

Yup, probably open at $90 instead of $45 like recent IPO's


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ultimatefighting

How does a DPO differ from an IPO in terms of pricing?


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ultimatefighting

> RBLX has been already trading on the NASDAQ private market (more clubs we're not in The hell is that? >but you shouldn't expect it to suddenly double or triple on open in the public market. Why do you say this?


NOT-BAD-BUT-NOT-GOOD

Thank you for the DD. I can see you're pretty bullish on RBLX and in some way I am too. But there are a few points I've been thinking about lately that I would like to share and get everyones opinion on as well. ​ The first would be the demographic or age group of users playing Roblox. In their investor day presentation they stated they saw an increase of 107% of DAU's (daily active users) over the age of 13 in 2020. This is great but what I would really like to know if how many of those users are above the age of 18. These are the users that are most likely to own a credit or debit card and be making the micro transactions to generate their revenue. (you can view the presentation here: [https://www.youtube.com/watch?v=7XisxSUUbe8&ab\_channel=Roblox](https://www.youtube.com/watch?v=7XisxSUUbe8&ab_channel=Roblox) skip to 1:13:41 for the DAU chart) ​ The second would be a build up from the DAU argument. How many of those DAU's are actual users vs bot? Now I don't think this is a huge point to be arguing because as you stated Roblox was the most viewed game on YouTube behind Minecraft so obviously the player base is there, but it's something to think about. In my opinion, more bots in a game makes me less inclined to play it. ​ Finally, the third would be engagement hours. I assume a large percentage of their player base is under the age of 17-18 and are still in K-12 or whatever your country considers pre college. As we know in 2020 everyone was forced to continue education from home. More time in front of the computer = more time on Roblox? How many hours will users be able to commit to once school starts back up? ​ Again, thank you for your DD I really enjoyed it. If anyone agrees or more importantly disagrees with any of the points I made please let me know I'd love to hear your opinion.


ReallyNiceGuy

Purely anecdotal but: 1) Despite having an large age group that is under 18, there are many ways that children have access to payments. I have students with younger siblings that spend all of their allowance on Robux. Instead of receiving an allowance, they are willing to perform chores and study in exchange for Robux. I cannot say that all children will be able to pay for Robux, but Robux microtransaction rates are significantly higher than any other mobile games (I'm in Hong Kong where mobile gaming is mostly king). I'm hypothesizing that by being a platform, Roblox allows kids to diversify in many different gametypes, so they don't get bored compared to other games. As such, they can just focus all their allowances into Robux. From some of the parents' perspectives, paying kids in Robux is fine as long as they keep up their studies and do chores. Personally, I'm just wondering about how a company with such a large audience can make so little money. Another point that's bothering me is how unpredictable games can be (see how Minecraft rose and dropped and then rose again in popularity, or the rather quick rise and fall of Among Us and Fall Guys) and especially how fickle younger audiences can be (see how fast young kids got tired of Frozen).


NOT-BAD-BUT-NOT-GOOD

Thank you for your insight! There is no doubt that under age users can get access to Robux in ways other than owning a credit or debit card. You stated that mobile gaming is king in most parts of the world and I cannot disagree with you there, I think Roblox has huge potential in that portion of the market. In response to the last paragraph of your post, I think you make a good point. Younger audiences eventually outgrow these types of games (by types, I mean sandbox childish graphics looking games) and eventually move onto a more concentrated portion of the gaming market (FPS, MMO, etc.). This is also why I would like to know the % of players are in the 17-18 range of that chart because I think it would be a very small %. Another thing I took a look at recently was Twitch. The games you mentioned earlier all have a huge following on Twitch and the arguably the top 1% of streamers with the biggest followings all play those games. I think people underestimate the power of the Twitch platform and what it can do for a video game. As of this very minute Roblox has less than 4k viewers on Twitch.


106milez2chicago

What supports the 7x + jump in company valuation from the previous year?


insultant_

Start up hype, son!


God-of-Memes2020

Yeah, I was pretty excited about this a few months ago but I won’t touch it at the current valuation. That’s insane.


jejakqmqm

Nice write up. Will be interesting to see if this is one of those IPO’s that spike 50-75% on the first day of trading to some bloated valuation. I really want to invest in this but not willing to pay a 50x revenue multiple.


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ultimatefighting

Were retail boys able to get in at profitable levels?


DoctorQuinlan

As in the popped pretty high the first day? Is there a safe way to buy roblox in the beginning and avoid loss. Like placing a buy and sell order at the same time if it falls


Ordinary_investor

I have a feeling, considering last year market insane increase combined with lately the hesitant markets, Roblox IPO possible failure might end up being the needle that in the short term pops the market bullish sentiment.


Chroko

And Tesla's market cap increasing by more than $500B in 2020 then plummeting in value by some $280B (which is more than 10x the possible Roblox valuation) is not a sign of ending bullish sentiment? You don't seem to realize how massive the market is! Roblox is just a blip.


DoctorQuinlan

Do you think Tesla evaluation is correct now ça


tothefuckingmoonn

It’s still so funny to me that a company with projected 1bn+ rev is valued at 20bn+ when CRSR has a 3bn market cap and 2bn in projected revenue.


bushbaba

Roblox cost of product is much, much less than crsr. But yes the valuation is nuts. It’s not like roblox will grow by 100%+ yoy


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StoryBasedRBLX

Their bookings (robux sales) grew 39% from 2018 to 2019 then 171% from 2019 to 2020 generating $1.9b that year. you don’t know what’s coming


skilliard7

Software has little to no marginal costs to produce(if you double your customers, costs are nearly the same except maybe slightly increased costs for extra servers and support). Hardware, on the other hand, has to consider margins. Roblox definitely seems overvalued, I won't be buying it. It'll probably pop after the IPO because IPOs always seem to, but I don't see this being a good long term investment at that valuation.


ultimatefighting

Why not make money off the pop and sell?


iam_mustafa

Because gaming software like fortnite and Call of Duty are easy to scale up. Only hardcore gamers and gaming streamer buy up merch


Cosmic-Warper

Corsair also has prebuilts and computer peripherals aren't exclusive to hardcore gamers at all


mynsx5

My strategy is to try and get in at the 45-50 level and pray that it will keep going up the first week. After that, I'm going to start shorting the company. The valuation they are giving themselves is so that the owner/early institution investors finally get paid off a boat load and hope to leave the worthless bag to retail investors. I can see this stock plummeting by years end when all schools are open and kids are not on it during the day.


ultimatefighting

I'm hoping to get in on the same level and will most likely sell by EOD


Trzebs

History has been showing that it's best to avoid investing in IPOs because they tend to drop sharply after the hype quickly dies down within the first few days. Better to wait until AFTER the lockup period which tends to see another sharp drop in share price as company shareholders sell off their shares


DarkDoomDoom

but it will be a DPO, do we know if there will be a lockup for it ?


Buddha_is_my_homeboy

Since you haven’t gotten an answer, with a DPO there is no lockup period. No new shares are being created. The shares being made available to retail are being sold from the current shareholders


Trzebs

Hmmm, that, I was not aware of. I'd have to research more to give a more informed answer since I'm not as familiar with the dpo process


NasdaqLaggards

> * Identified material weakness in internal control over financial reporting which resulted in restatement of their financial states for 2018 and 2019 and first 9 months in 2020. What is this all about? Seems troublesome if they were playing around the edges trying to boost their numbers. Seems like a non-event if they misinterpreted some new accounting pronouncement and adjusted some entries that had no impact on the actual operations of the business.


thefiinessekid

Not necessarily. PA firms will publish qualified audit reports for any internal control weakness that could *potentially* lead to material misstatement of the financial statements.


NasdaqLaggards

Yeah, the material weakness didn't bother me, it was the restatement.


thefiinessekid

They are required to make this restatement retrospectively under GAAP. For some changes in Accounting methods, they are applied either retrospectively or prospectively. Shouldn’t be a big deal. The material weakness of internal controls is actually the far bigger worry.


NasdaqLaggards

I didn't do the due diligence, but based upon the original post, the restatement wasn't due to the application of new accounting pronouncements. It was a direct result of the identified material weakness.


Chroko

> a user simply launches whichever one of these free experiences they want at any time. There is no purchasing of the game There are paid games on Roblox, most notably Bloxburg. The creator of a game can sell it however they want - free-to-play, in-game-purchases or paid up front. Your DD has some holes!


DrMorry

Good work! A couple of thoughts on the DD: I don't see the market cap clearly. This should be front and centre. You mentioned 'shares', is this the total shares in the company or just those in the IPO. This is the most important factor, because we don't know what the company is being valued at. You have included a trend of earning g's from 2017, but not for income (loss). I'd be interested to know how losses are tracking. Again well done. I made the points above because I looked into this ipo and thought the company actually looks great, but is way way over priced. Best of luck.


Not_FinancialAdvice

> I'd be interested to know how losses are tracking. Directly from their S1 filing: https://www.sec.gov/Archives/edgar/data/1315098/000119312521038726/d87104ds1a.htm#rom87104_10 (Consolidated net loss, paraphrasing to whole numbers!) 2018: 88MM loss on 324MM revenue 2019: 71MM loss on 508MM revenue 9 months ending Sep 30, 2020: 197MM loss on 613MM revenue for comparison; 9 months ending Sep 30, 2019: 38MM loss on 360MM revenue Not a financial advisor/not financial advice.


After-Cell

I just want to say thanks for this. We're going to do a lesson on your post OP!


GhostfromTexas

Curious as to what the lesson is! It's my first DD writeup, so I suspect a few flaws in my logic haha.


REDDlCK

Lol, you don't mention their combined net loss of 500 mil since starting operations. A company at the end of the day has to make a profit at some point. Roblox saw amazing growth in their user base during the pandemic, which is an amazing catalyst for their business and one many businesses would love. The question becomes, at what point will they actually start making a profit if not in the best case scenario? This is a horrible question to be left with at the end of a pandemic which saw kids locked up at home with access to more time than ever to play games. Careful you don't get caught holding the bag on this trash.


thefiinessekid

They cash flow rich from their operations and their income statement will definitely struggle to post profits as they recognize revenue on a straight line basis over the expected life of customer (23 months). The fact that they expect customers to stay for 23 months say enough about their potential. I would say they are just around the corner from profitability, just need to introduce some more cross selling opportunities.


Negative_Connection6

Stop limit ideas?


DelightfulDonald

Don’t buy this shit in the first place?


voneahhh

I wouldn’t call it shit; it hardly has any direct competitors, a ridiculous fan base, and a pretty decent moat. Besides which with the way new tech stocks have been doing it wouldn’t hurt at all to open a small position on launch day and reevaluate after, you’ll most likely still make have ample opportunity to sell for profit if you find you don’t believe in its long term plan.


ultimatefighting

Whats a moat?


mukavastinumb

If you are asking what is a moat - it is basically safe guard against competition. For example patent or any other measure. For example Apple's ecosystem is a moat against competition. If you stop using iPhone, your other products won't work as easy as before. Coca-Colas recipe is a moat as competition cannot replicate the exact flavor. If you are asking what is Roblox's moat - 75% of US Tween population. Try capture that amount of users.


Zylonite134

Tried their app and it looked like something from the Netscape web browser era...Not sure why would anyone be interested in playing on this platform.


GhostfromTexas

It's a gaming culture for kids based around YouTube content creation and Mobile access, and it's all free. You just pay if you want extras


Zylonite134

>It's a gaming culture for kids based around YouTube content creation and Mobile access, and it's all free That's just sad


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Almedinz

Minecraft is a game that appeals to everyone and has updates that are all well received


Nota33rddegreemason

Just buy Unity, it’s tanked a good amount


the2038problem

Unity is a good chunk of my portfolio. Their long term applications and stable growth are an amazing opportunity. I have been researching roblox and will definitely keep my eye on it, but I am not convinced just yet.


drex8762

My kid is addicted to this app. For that reason I will be buying at some point. Will probably sit back and watch for a bit before investing long term. Might be a good short swing Wednesday


ultimatefighting

>short swing Meaning buying and selling on the same day?


drex8762

That or holding for a day or two if the price action is good.


berto0311

When is lockup period over? When can original investors sell?


Buddha_is_my_homeboy

There is no lockup period for DPOs. Shareholders sell their shares directly to retail


jdillingerr714

There is. It’s 180 days.


Buddha_is_my_homeboy

https://www.investopedia.com/investing/difference-between-ipo-and-direct-listing/ > It does not involve any underwriters or other intermediaries, there are no new shares issued and there is no lockup period.


Everythings_Magic

Ive been watching this knowing how addicted my kids are too it but I don’t allow them to pump money into it and they still love it. I don’t see how they expect to double revenue in a year. It’s popular because it’s free. Parents pay a few bucks here and there to shut their kids up and keep them out of their hair. It’s not like Fortnite that pushes out events and actively seeks to keep engagement up. It’s passive gameplay that’s akin to babysitting. Am I missing some major revenue stream? This looks like day trading territory and not a good long term investment bet. Edit, according to my son they do have a subscription model.


5billionthhuman

What do you all think about the 1+ billion in bookings (as opposed to the loss in revenue): https://digitstodollars.com/2020/11/24/if-you-know-you-know-the-power-of-roblox/


SavageRabbit4918

Love the DD. Thank you... I have 2 nephews and 1 niece (4, 6, 10 Yrs old) home-schooled.. they are obsessed with this game and I pay a gr8 deal for them to play to leave me alone ...lol I pay a lot and will continue to as long as they love it.. they will spend hours on it... Their mom, my sister cuts them off if they are on it too long(Understandably).. But I like kids to create their own worlds and they seem to find each other’s avatar in Roblox worlds despite having 3 different iPads while playing next to each other. I have been waiting 8 months to buy Roblox shares. My only issue since trading and investing is when to buy an IPO.. I hv be burn when I buy early or wait too late.. I am reading each comment to get a feel on what my Reddit WSB Squad is thinking about Roblox. I am going to buy but proceed with extreme caution..


Caranthiir

Yea im not touching this


moliver816

So I’m new at IPOs, but if there are 199 million shares sold and they go for $45 a piece, that’s a market cap of about 9 billion right? That’s way lower than the 29.5 billion valuation from earlier this year. I assume I’ve done something wrong, right? What am I missing? Is there something else that makes up part of their market cap in addition to the shares they will sell, and how do I find the valuation of that part of the company?


Comfortable_Poem8242

the market cap is determined by number of outstanding shares, not how many are sold on DPO day


moliver816

Makes sense. How would you figure out the number of outstanding shares? I haven’t seen that listed anywhere in any articles or anything.


GhostfromTexas

For the Class A shares, roughly 65.5% are already owned, so that means 34.5% are up for grabs 34.5% of $29.5B = 10.77B 65.5% of $29.5B = $19.32B ​ If we reverse this and look at it from an opening price perspective... If we say 34.5% should be 8.95B, then that'd be a market cap of 25.9B for the company, so stock market is about 3.6B under it's last eval


moliver816

Where do you see that “roughly 65.5% are already owned”? I’m interested in roblox, but I’m also interested in being better able to judge ipos in the future.


GhostfromTexas

It's in my DD writeup under the Risk Factors section. In their SEC Filing they write >As of January 15, 2021, our executive officers, directors and holders of 5% of more of our Class A common stock collectively beneficially own approximately 65.5% of the outstanding shares of our Class A common stock and 100% of the outstanding shares of our Class B common stock and continue to have substantial control over us, which limit your ability to influence the outcome of important transactions, including a change in control.


Vaderzer0

Bloomberg article direct quote. "The company is not profitable."


Super_DAC

To be fair neither is Door Dash or a ton of other companies and look how they’re stock it doing


Lickluckchan879

This game is a hunting ground for pedos.


stubyourtoenailnow

Literally no? Go through most of the articles about pedophillia on the site and hit CTRL-F and search for Third Party Websites. As an active player on the site, there’s hardly any cases like that at all, and even if there was, Roblox tries their best to help.


Boston_Bruins37

Now compare it to TTWO, and youll find its not even close in value