Roblox (NYSE:RBLX) stock soared yesterday right after its IPO, and those who bought in early can thank Cathie Wood for some of the hype.
The bullish investor, who runs Ark Invest and its exchange-traded funds, is continuing to bolster her status as a rockstar in the eyes of young investors with her firm’s purchase of half a million Roblox shares.
This position in the Ark Next Generation Internet ETF (NYSEARCA:ARKW) is currently worth $36 million, and it will likely continue to go up. RBLX stock, first priced at $45 a share, quickly surged upwards of $70. This is a jump that some savvy “meme stock” traders could have seen coming.
The Roblox IPO has been a highly-anticipated event. The video game company is soaring in popularity recently, thanks to the Covid-19 pandemic. The game’s teen demographic have magnetized toward it as school closures have left them plenty of free time.
Given its business model of putting game development into the hands of its players, RBLX stock presents a unique alternative. Much of the game’s appeal is in allowing users to generate their own levels, which saves the company development costs.
Additionally, the company rides on the trend of profiting from micro-transactions. This lets users spend as much as desired on virtual items without having to make an initial purchase.
Wood’s purchase is a key point in the Roblox IPO that is occurring. Her keen eye for trends is known within the world of trading, namely by her huge purchase of Tesla (NASDAQ:TSLA) stock early on. Her faith in Roblox could indicate large gains in the future.
The Bottom Line on Cathie Wood and RBLX Stock
Investors need to be paying attention to RBLX stock. Wood’s track record of forward-thinking investments indicate great things for the company. With this in mind, if you missed the boat on her other bullish investments in areas like crypto or space exploration, this could be your time.
At the same time as Wood’s investment, Reddit’s newly popular r/WallStreetBets board is pushing RBLX stock. Of course, if you have been paying attention to GameStop (NYSE:GME), you understand the significance of a r/WallStreetBets cosign right now.
RBLX stock is up 4% as of this morning.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.