- Roblox (RBLX) stock has been getting clobbered lately, but there’s a contrarian opportunity here.
- A Cathie Wood fund is snapping up shares, so retail traders might want to follow in her footsteps.
- Investors should put Roblox on their watch lists if they’re seeking exposure to gaming and the metaverse.
Headquartered in California, Roblox (NYSE:RBLX) provides a platform for immersive, interactive gaming. As an entry point into metaverse investments, RBLX stock deserves investors’ attention and it’s trading at a favorable price point now.
There’s no denying it. If you’re a young gamer, Roblox can be highly addictive — but not in a bad way. As the company points out, Roblox “is ranked as one of the top online entertainment platforms for audiences under the age of 18 based on average monthly visits and time spent.”
What makes Roblox so magnetizing for under-18 gamers today? I’d say, it’s not just the games themselves, but the vast social ecosystem that Roblox has built. For developers and players alike, Roblox is clearly more than just “child’s play.”
The metaverse is serious business, and Roblox is serious about attracting investors into the fold. Indeed, one well-known investor has apparently taken a long position in Roblox shares, even while the company is deeply out of favor. Game on, as they say.
What’s Happening with RBLX Stock?
Come to think of it, “deeply out of favor” might not be adequate to describe what’s happened to RBLX stock. From a 52-week high of $141.60, the stock has recently dropped to the $30 area.
So, if you’ve been sitting on the sidelines all this time, now’s your chance to pounce on what might be a terrific bargain. If you act fast, you might have an opportunity to take a stake in Roblox while the share price is half of its $64.50 debut price.
If you do, then you’ll be in very good company. Reportedly, Cathie Wood’s Ark Invest recently purchased an eye-popping sum of 739,082 RBLX stock shares.
That’s a big bet, even for a famous fund manager like Wood. Some folks might know her as a growth stock zealot, but perhaps Wood should be considered a true contrarian at heart.
It takes guts to buy RBLX stock around the time that Morgan Stanley analysts are halving their price target on the stock, from $65 to just $32. But then, investors shouldn’t underestimate Wood’s market insight — or Roblox’s potential to stage a fierce comeback, for that matter.
Seeing Is Believing
Maybe you’re not yet sold on Roblox as an investable business. After all, if Morgan Stanley’s analysts are slashing their price target, how can retail investors feel bullish about Roblox now?
Ultimately, wagering your hard-earned capital on RBLX stock means believing not just in gaming, but in the build-out of the metaverse. To truly understand the value of Roblox as a business enterprise, you’ll want to see what modern interactive gaming looks and feels like.
One good place to start is a recent press release from Roblox, highlighting advancements in real-time facial animation for avatars. It’s fascinating to see just how far face detection software has come in recent years.
While you’re at it, feel free to check out Roblox’s primer on layered clothing for avatars. Evidently, users can outfit existing Roblox avatars with up to six layers of clothing to fit any avatar body type.
It’s undeniable: the metaverse is getting a little bit bigger and a little bit better with each passing day. Kids tend to enjoy the Roblox platform, but really it’s for anyone seeking an enjoyable, immersive virtual experience.
What You Can Do Now
Wood’s stake in RBLX stock shouldn’t be your only reason for making an investment. You’re invited to see for yourself what Roblox has to offer as a 3D virtual world provider.
At the end of the day, you’ll either be a believer in Roblox, or you won’t. If you’re on board, though, then consider an investment while the share price is down. If Roblox is good enough for Wood, then perhaps it’s good enough for the rest of us, as well.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.