Roblox Stock Price: A RBLX IPO Is On Its Way!

  • October 22, 2020

Is a Roblox stock price coming soon? The RBLX IPO is no longer a rumor...its a fact! The timing seems perfect. Why? Well for one thing, this pandemic has been a business killer for some industries.

With the whole world going into a strict lockdown, lots of customer facing businesses have suffered and the economy as a whole has taken a massive hit. 

However, not all is gloom and doom. There is one sector that has been making a killing and that is gaming and to be specific, online gaming.

The pandemic period has witnessed a 40% surge in the time spent on online games on mobile devices. One of the prime beneficiaries of this surge has been Roblox owned by Roblox Corporation who have officially made a confidential filing for public offer on October 12, 2020.

What Is Roblox?

  • Roblox is an online game platform and game creation system found in 2004 and released in 2006 where players can play games created by other users. Simply put, it's a platform amalgamating features of Second Life (Avatar creation, world exploration and social networking) & Minecraft (world building). In essence, it allows players to build their own games and game worlds which are then hosted on the platform serving as a hub connecting the game worlds.

Roblox is a free to use platform with in-app purchases. It's mostly targeted towards children and tweens. It's available on Windows, Xbox One, Android phones and iOS. What does this mean for a RBLX IPO and Roblox stock price?

Roblox Stock

1. How Does Roblox Make Money?

Roblox stock price would be nothing if it couldn't make money. So where does it get its money from? Well, it derives the bulk of its revenue from in app purchases. 

It takes 80% of the proceeds and passes the remaining 20% to the developers of the games. Nice profit sharing for those who work hard at creating these games.

It has claimed 150 million active users as of July 2020. It also sells premium membership to its developers with plans ranging from $4.99 USD/month to $19.99 USD/month.

A few of its popular games include Adopt Me (Pokemon clone), Jailbreak (Grand Theft Auto clone) and Murder Mystery 2 (Mafia/Werewolf clone) amongst others. 

Roblox has grossed $1 billion USD in lifetime revenue with 67% ($677 million USD) coming from USA and 9% ($89 million USD) coming from Great Britain.

The company had revenues of $335 million USD in 2018. In 2019 it claimed developer payouts of $110 million USD. With developers getting approximately 20% of revenue, this would roughly project Roblox revenue for 2019 of approximately $440 million USD; up 64% over 2018.

It has also projected its 2020 developer payout at $250 million USD thus projecting its revenues of approximately $1 billion USD, more than double of 2019. Not bad for a kids game with basic graphics huh?

Roblox Stock Offerings

  • Is a RBLX IPO coming? Roblox allows users to create games using its own proprietary, Roblox Studio. It claims that its developers create 20 million new games every year. This creates an element of never ending discovery ensuring that its players continue visiting the platform leading to a very sticky customer base.
Roblox allows users to create, buy and sell virtual items from clothes and accessories for their avatars to weapons and even hot air balloons.

Items can be bought by anyone. However, they can only be sold by administrator accounts and premium members. 

All transactions take place through an in-app currency called “Robux” which can be exchanged for real world currency through the website’s Developer Exchange System.
Current rate of Robux is $350 USD for 100,000 Robux and has remained unchanged since 2017. In addition, Roblox hosts virtual events and engages in promotion of movies.

The ongoing pandemic has led to the platform becoming a hot thing for hosting virtual birthday parties and play dates. This has been accelerated by the combination of parents having to work full time from home and kids being cooped up whole day.

It's forcing parents to find alternatives to keep kids busy. And giving us traders a Roblox stock price to trade here shortly. 
RBLX ipo

1. Roblox Stock Price and Its App

Roblox stock derives the bulk of its revenue from in app purchases taking 80% of the proceeds. Then passing the remaining 20% to the developers of the games from which the purchase occurred.

It has claimed 150 million active users as of July 2020[1]. It also sells premium membership to its developers with plans ranging from $4.99 USD/month to $19.99 USD/month[2].

Few of its popular games include Adopt Me (Pokemon clone), Jailbreak (Grand Theft Auto clone) and Murder Mystery 2 (Mafia/Werewolf clone) amongst others.

Roblox has grossed $1 billion USD in lifetime revenue with 67% ($677 million USD) coming from USA and 9% ($89 million USD) coming from Great Britain.

RBLX ipo

Source: https://sensortower.com/blog/roblox-one-billion-revenue

The company had revenues of $335 million USD in 2018[3]. In 2019 it claimed developer payouts of $110 million USD[4] and with developers getting approximately 20% of revenue.

This would roughly project Roblox revenue for 2019 of approximately $440 million USD, up 64% over 2018. It has also projected its 2020 developer payout at $250 million USD[6].

Thus projecting its revenues of approximately $1 billion USD, more than double of 2019. How would that affect a Roblox stock price?

YouTube Growth Indicates Something....

Have you noticed YouTube channel growth can tell you a lot about a company? If a company is seeing explosive growth on their YouTube channel, it can be a giveaway that the general public is loving the content or service. Let's take a look at the Official Roblox channel stats below. 

RBLX YouTube Subscribers

Note that the red line is the growth of the channel, which has steadily increased in the last 30 days (The red line dives because the tally is incomplete during the time of the chart recording.

Roblox Stock Is Coming!

A RBLX ipo is probably not something you would normally consider investing in, but given the state of the the world right now, online gaming seems like a smart play. With the projected growth due to to numerous social and economic factors, its something to think long and hard about. 

Some other good plays in the gaming industry are $ATVI, $NTDOY and $EA to name a few. While it might be fun to invest in hype,  the Bullish Bears are big fans of the charts. So look at Roblox stock price with the charts before buying and make sure you're getting a good entry. No one likes to buy something and have it drop for weeks shortly after, and while technical analysis isn't the end all be all for investors, it's certainly nice to know a thing or two about a stock chart before you blindly buy. 

If you're looking to master the art of technical analysis look no further than our free stock courses. Thanks for reading and see you in the trade rooms! 

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