The Reason Behind Why Roblox Stock Rose This Afternoon


Roblox (NYSE:RBLX)

As of 14:02 GMT, Roblox’s (NYSE:RBLX) share price was up 7.4%. ET on Friday resulted from management’s comments during the Roblox Developers Conference. In addition to providing users with new avenues to express themselves on the platform, management has announced several new features and tools that developers can use to produce content.

However, it appears that the statement that immersive advertisements will be arriving on the platform in 2023 was what drove the stock. Roblox’s (NYSE:RBLX) stock has lost more than half its value so far this year, and investors are understandably concerned about the company’s slowing growth in revenue and bookings.

What’s the Reason?

Management has placed a high focus on developing novel approaches to monetizing the platform’s 58 million users through advertising, and it appears that these developments are on the verge of being implemented. The number of people using Roblox (NYSE:RBLX) has increased by more than 100% over the past three years, yet the average amount each user spends on the platform’s virtual currency (Robux) is decreasing. The average number of bookings made by each user experienced a year-over-year decline of 21% during the second quarter.

At the Friday conference, Roblox (NYSE:RBLX) announced that it would offer “revolutionary 3D advertising,” which will provide both developers and marketers with the opportunity to benefit from “ad experiences that have never been seen before.”

The management also revealed their intentions to introduce new features to the market that will give creators a more significant say in the amount of a virtual good’s limited supply that they make available.

What’s Next?

The market has every reason to get somewhat more enthusiastic about the Roblox (NYSE:RBLX) stock. A much-needed boost to revenue growth can come from implementing new regulations over the scarcity of items in the market. Users will naturally pay more for highly coveted things when their availability is reduced and they become more scarce. Because of this, there will be a greater incentive to spend virtual currency to purchase material that is in high demand.

The management has provided investors with apparent catalysts to watch, which might drive a turnaround for this leading metaverse stock. These catalysts include the forthcoming new commercials and adjustments to the marketplace.

Featured Image – Megapixl © Zolakstock

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.