Roblox: A Hot IPO In Video Gaming

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When it comes to fast money, sometimes, there’s nothing as powerful as a new kid on the block, explains growth stock expert Mark Skousen in his speculative advisory service, Fast Money Alert.

The reason why is because fast money players often see the potential profit and trading opportunities in some of the market’s hottest initial public offerings (IPOs).

Today, we’ve identified one of those very recent IPOs that we think is going to light up the fast-money scoreboard. That company is video game maker Roblox Corporation (RBLX).

On March 10, RBLX began its life as a publicly-traded company. Shares debuted at $64.50 — well above the reference price of $45 set by the NYSE — and quickly traded up to $72.93. This tells us the fast money loves this one.

So, why Roblox? Well, if you have any kids or teens in your household, you probably already know what Roblox is. If not, it is an online video game platform where you can play and create games. It’s similar to Minecraft, but the characters and worlds look a little more like "The Lego Movie."

What we like about it is that the platform currently has over 150 million monthly active users and 13.5 million daily active users, an increase of 39% from the previous year. Kids can play Roblox alone or with friends across the globe, and they have been increasingly doing so for the last decade.

This platform growth has allowed the company to monetize its game by allowing everyday users to become game developers and create their own games using the Roblox Developers Kit. So, developers of all ages can create a wide variety of games that other users play.

These developers can charge money to play the games, or they can offer free games where players can pay to unlock special features and new levels. Oh, and unlocking those special features requires, you guessed it, more money from users.

How much money? Well, in 2019, Roblox had revenue of $488 million. This was a tenfold increase from two years prior when it received just $45 million.

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