Roblox (NYSE:RBLX) made its name as a game that combined gaming with social media. It also came with some concerns, and those concerns are starting to amplify, along with the economy portions. Roblox lost over 4.5% in Thursday afternoon’s trading, and it’s those concerns—along with new short calls—that are leading the way.
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Word from the Bear Cave suggests that Roblox has serious potential problems. How serious? Let’s start with “child abuse,” and from there, go into things so disgusting most reasonable human beings would rather not name them. Roblox, unsurprisingly, came out to defend itself, suggesting that the Bear Cave’s claims are without merit and are essentially just repetitions of earlier statements. However, the Bear Cave also noted that Roblox was “consistently unprofitable” and was subject to not only more regulatory issues, but also more competition.
However, that may not be so much of a problem, as Roblox is also rolling out some new products besides. Roblox plans to allow user-generated content for sale in the game. Users will be able to create not only “full avatar bodies” but also “standalone heads” for sale.Naturally, Roblox will take a cut of that action, but it should prove helpful all the same in bringing in not only new revenue, but also new players who want to make some cash off their creativity.
Analysts, meanwhile, don’t see much problem with Roblox. With 12 Buy ratings, two Hold and four Sell, analyst consensus calls Roblox stock a Moderate Buy. Further, Roblox stock comes with a substantial 41.36% upside potential thanks to its average price target of $39.39.
