Roblox Stock: Falling Bookings Raise Concerns
Conviction is a critically important virtue of an effective leader. You must believe what you say when you say it. There’s no room for misinterpretation when you’re commanding the troops. This same principle extends to the investing world. We often make fun of the term “cautious optimism” because it epitomizes how many pundits are afraid to speak with conviction and have an actual strong opinion about an investment. That’s because when you’re wrong, people will come out of the woodwork to point out what a short-sighted buffoon you are. When you’re right, it’s the sound of crickets.
To mitigate this problem, simply formulate a strong opinion based on evidence you neatly gather and present to support your thesis while also considering both sides. If you end up being wrong, just do what every MBA learns to do in bee school – shift the blame to someone else and quickly change the subject.
Today, we want to formulate an opinion about Roblox (RBLX), a possible play on “the metaverse.”
The Roblox Business Model
Just over a year ago we looked at how Social VR Brings People Together in Virtual Worlds and said “Roblox may well be worth a deep dive for our premium readers in the future, with so few attractive stocks in the current VR/AR metaverse.” Since then, shares of Roblox have fallen 47% compared to a Nasdaq loss of 10% over the same time frame. If you liked Roblox a year ago, y
