How to Buy Roblox (RBLX) Stock

Roblox Corp. (NYSE: RBLX) released nearly 199 million shares for trading on the New York Stock Exchange on March 10, 2021. Instead of going the traditional Initial Public Opening route, Roblox chose a direct listing. Roblox Corp. trades under the ticker RBLX on the NYSE. While the initial stock release is now history, Roblox remains a compelling option in the growing online gaming market.

Founded in 2004, Roblox is an online gaming platform that enables users to create, share, and play multiplayer games. The platform is free-to-play, with revenue generated through in-game purchases using "Robux," Roblox's digital currency.

Although Roblox has been around for years, it saw a significant surge in growth during the COVID-19 pandemic as more users turned to online gaming. As of 2024, Roblox boasts over 230 million active users, with more than 50% of U.S. children under age 16 playing on the platform.

How to Buy Roblox (RBLX) Stock

If you are already familiar with how to buy stocks, you likely had everything you needed when the IPO was announced. You can track updates on Roblox by following the New York Stock Exchange (NYSE) ticker for Roblox. Never bought a share of stock before? Our guide will help you invest in Roblox’s offering and be prepared for your first day of trading.

Step 1: Pick a Brokerage

As a retail investor, you cannot buy and sell shares of stock directly on the market of your choosing. Instead, you’ll need to work through a broker, a financial service company authorized to buy and sell stocks on your behalf according to your instructions.

If you live in the U.S., you won’t have trouble locating a broker that can help you invest in a direct listing. Roblox began trading on the NYSE after listing, which every broker offering accounts in the United States supports. This means that you can shop around for brokers and decide where you’d like to open an account. Some of the factors you may want to consider when you decide where you’d like to open a brokerage account might include:

Commissions and Fees

Some brokers offer commission-free trading, while others charge a small fee when you buy or sell a share of stock. Check each broker’s fee schedule so you aren’t surprised by trading fees.

Account Types

Do you need to open a Roth IRA, a taxable brokerage account or a different type of trading account? Familiarizing yourself with the types of brokerage accounts can help you choose the best option in terms of tax reporting.

Access to Additional Market Types

If you’re only interested in buying and selling shares of stock that trade on American markets like the NYSE and the Nasdaq, you can typically choose any broker based in the U.S. If you’d like access to foreign markets, cryptocurrency markets or forex trading, choose a broker that offers access to all of the assets you want to add to your portfolio.

Step 2: Decide How Many Shares You Want

Next, take a look at the current trading price of Roblox’s stock and decide how many shares you’d like to purchase. Roblox opted for a direct listing rather than a traditional IPO, which means that shares will be sold at whatever rate the market determines they’re worth.

If you chose to invest in Roblox on the date of its listing, it would’ve been a good idea to set a budget before the market opened for the day. As is the case with any other stock, don’t invest more money than you can afford to lose — it’s normal for stocks to dip in value after their initial opening.

Step 3: Choose Your Order Type

Once you’ve decided how many shares of Roblox stock you want to purchase, you can place an order to buy stock through your broker’s platform. Most brokers offer access to multiple types of orders. Learn a few of the most common buy orders you’ll see.

Market Orders

Market orders buy or sell immediately at current market price. Limit orders trade at a specific price to avoid overpaying or underselling. If the market price doesn't hit the limit, limit order may not go through. Traders should know the difference between market and limit orders. Use market orders for quick execution and limit orders for price control. Choose order type based on strategy and market conditions.

Limit Orders

Limit orders let investors choose a specific price to buy or sell a stock. This gives them more control than market orders. With a limit order, investors can avoid paying more than their desired price. However, if the stock doesn't reach that price, the trade won't happen. Despite this, limit orders are crucial for managing investments effectively. They help investors enter or exit positions strategically, reducing risk and improving trading discipline. By using limit orders, investors can navigate the market more precisely and with better control.

Trailing Stop Orders

Trailing stop orders protect gains by adjusting the stop price automatically. It is set at a certain percentage or dollar amount below the current market price. As the stock price rises, the trailing stop price also moves up. If the stock price falls and hits the trailing stop price, the order is executed at the next market price. This order helps lock in profits and allows for potential gains.

Stop Orders

Stop orders activate a trade when a stock price hits a specific stop price. This stop price is set by you. When the stock price reaches or goes above this stop price, the order becomes a market order and is executed at the current market rate. This means the trade will happen at the best available price at that moment. Stop orders are used to limit losses or lock in profits by automatically triggering a sale or purchase at a certain stock price level.

Step 4: Execute Your Trade

As soon as you place your order through your brokerage platform, you can relax. Your broker will take care of filling the order on your behalf.

Roblox Financial History

Roblox's initial fundraising began in 2005 with a $560,000 Series A round. The company continued to secure funding over the years, including a $150 million Series G round led by Andreessen Horowitz in February 2020. As of 2024, Roblox is valued at approximately $30 billion, with its most recent funding round raising $520 million in January 2021.

Roblox has also demonstrated impressive sales performance. For the first three quarters of 2023, the company reported revenues of $1.4 billion, surpassing its previous estimate of $1.35 billion. Net losses were $149 million, an improvement from an earlier estimate of $174 million. This represents a significant revenue increase of about 90% compared to the same period in 2022.

RBLX Potential

Roblox (RBLX) shows significant growth potential in the online gaming sector, with a forecasted sales increase to $896.72 million, up from $801.30 million in the previous quarter. This positive trend underscores the platform's ability to attract and engage a growing user base, leveraging the demand for immersive gaming experiences.

Despite this, Roblox has faced challenges in meeting sales estimates over the past year, underperforming relative to industry peers. This suggests difficulties in sustaining growth despite high user engagement. Investors are closely monitoring whether the promising sales forecast will lead to effective execution and market leadership.

In summary, while Roblox's sales forecast indicates strong future revenue potential, the company must address its recent performance issues to fully capitalize on its growth opportunities in the competitive online gaming market.

When Did Roblox Go Public?

Roblox amended its documents to postpone its IPO to February 2021 from Q4 of 2020, then filed an additional amendment, pushing the IPO date to March 10, 2021. Roblox had initially filed for a standard IPO but later opted for a direct listing after DoorDash and Airbnb priced their IPOs below the stock opening prices. Roblox officially went public on March 10, 2021 with a price of $45 per share.

Why Should You Buy Roblox Stock?

Investing in Roblox stock can be a good opportunity. Roblox is a leading platform in the growing metaverse market. It attracts millions of users, especially younger ones, with its engaging gaming experiences. The company has a strong user base and a wide range of user-generated content. This positions it well for growth in a digital world. Roblox focuses on improving user experience and safety. It also explores strategic partnerships and monetization options. These factors make it an attractive investment. Investors can benefit from understanding Roblox's business model to decide if adding its stock is a smart choice.

Growing Metaverse Ecosystem

Roblox is an important part of the fast-growing metaverse industry. The platform allows users to create content and enjoy immersive digital experiences, attracting a wide range of users. Roblox generates revenue through virtual goods, advertising, and premium experiences, which helps strengthen its position within the metaverse.

Diversified Revenue Streams

Roblox generates revenue from multiple sources, not just its in-game currency, Robux. The company also earns income through partnerships, advertising, and fees paid by developers for creating content on the platform. This diversified approach provides stability and helps Roblox remain resilient against fluctuations in any particular sector of the gaming industry.

Strong User Engagement

Roblox has a lot of active users, especially younger ones. People spend a significant amount of time on the platform, which fosters a dedicated community and generates ongoing revenue. This level of engagement also draws in new developers, contributing to content creation and the growth of the platform.

Considerations Before Buying Roblox Stock

Investing in Roblox stock can be an exciting chance. It opens doors to the growing gaming and metaverse markets. However, caution is key. Investors should look at different factors that may impact their investment. First, check the company's financial health. Next, learn about its revenue model. Analyzing user engagement is also crucial. Keep an eye on market trends and competition as well. Regulatory issues can affect Roblox's operations too. By considering these factors, investors can make smart choices. This helps them see if Roblox stock fits their financial goals and risk tolerance.

Profitability Concerns

Roblox is experiencing significant revenue growth, but it hasn't reached steady profitability yet. High operating costs related to platform development, infrastructure, and user acquisition might restrict immediate financial gains. Investors should understand that achieving profitability may take a while as the company prioritizes long-term growth efforts.

Competition in the Metaverse

Roblox competes in a challenging environment alongside other gaming and metaverse companies such as Epic Games with Fortnite and Meta with Horizon Worlds. These rivals are also heavily investing in immersive, user-generated experiences, which may affect Roblox's market share, user growth, and innovation. The fast-changing metaverse landscape requires Roblox to consistently set itself apart.

Dependence on Younger Audiences

Many of Roblox's users are younger players, which presents both opportunities and challenges. As these players grow older, keeping them engaged may become harder, especially if they start to prefer other platforms. There are also regulatory concerns related to children's privacy and online safety that could result in closer scrutiny or restrictions, potentially impacting Roblox's operations and growth.

Should You Invest in Roblox?

Deciding on Roblox stock involves considering key factors. Roblox is a top player in online gaming, showing strong growth potential from its expanding user base and innovative platform. However, its financial performance can be volatile, with fluctuations in sales and stock prices. Consider your risk tolerance and investment goals, as Roblox operates in a competitive market. Research recent financial reports, market trends, and industry conditions to make an informed decision on investing in Roblox stock.

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