Markets

Roblox Stock Plunges 16%, Wiping Out $6.2 Billion, After Weak Bookings Outlook

The game platform forecast falling fourth-quarter bookings and negative free cash flow, overshadowing a smaller-than-expected loss.

Roblox, the online game platform, sank Friday after forecasting falling bookings and negative free cash flow for the fourth quarter, with daily users down 9% from a year earlier. Shares fell 16.41% to $43.85 in Friday trading as of 9:53 a.m. ET, erasing $6.2 billion in market value.

A holiday quarter of shrinking bookings

The company projected a 10% to 15% decline in bookings for the holiday quarter. It also forecast a fourth-quarter net loss of $393 million, according to Seeking Alpha's summary of the outlook.

Daily active users averaged 138 million in the third quarter, per Benzinga, and the company reported a loss of 32 cents per share.

On Thursday's earnings call, CFO Naveen Chopra said management has little data to size the impact of Grand Theft Auto and assumes no near-term improvement in monetization.

A rebound erased

Roblox runs a platform where people play and build 3D experiences that other users can join. It is free to join, and the company keeps a portion of every transaction in Robux, its in-game currency. It also sells ads and a monthly subscription called Roblox Premium.

The quarter itself showed growth: revenue of $1.6 billion, up 15.6% from a year earlier, alongside a net loss of $227 million.

Down 35% for the year

At Thursday's close the stock was down about 35% this year, while the S&P 500 was up about 13%. Roblox had gained 27% in the month before Friday's session, so the drop erases much of that rebound.

The shares were on pace for a third straight daily decline and their biggest one-day drop since July 31, when they fell 26.9%.

Friday's price of $43.85 left Roblox with a market value of $31.3 billion.