How to Buy Roblox Stock
Want to embark on an investment journey with Roblox? Explore our step-by-step guide and recommended brokerage platforms. Let's dive in!
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Roblox Corporation has become a worldwide online platform where millions come together to create and enjoy games. But how do you invest in it?
Whether you're an investing newbie or a seasoned pro, you're in for a treat. This article will walk you through the steps you need to start your Roblox investing journey.
Curious? Let's get started!
Is Roblox on the stock market?
Yes, you can buy Roblox stock under New York Stock Exchange (NYSE). The Roblox ticker symbol is RBLX.
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When Roblox went public on the stock market in 2021, its shares started at around $64.50 each.
In 2020 and 2021, more people started using Roblox because it provided a fun way for kids to keep themselves entertained during the pandemic. This increased Roblox's value on the stock market.
However, things changed in 2022. The share price and the overall value of Roblox significantly dropped. The main reason was fewer users were buying Robux (like virtual money in the game), which directly affected how much money Roblox makes.
How to Invest in Roblox
You can buy Roblox stock through any brokerage or trading app. There are no special qualifications needed. Here are the steps:
1. Create an Account with a Brokerage
Before you can start investing in Roblox, you will need to create an account with a brokerage firm or trading app. You can visit the brokerage's website or app and follow the instructions there to set up your account.
Typically, you'll need to provide:
- Your name
- Social Security number
- Address, phone number, and email
- Date of birth
You may also need to provide a copy of your driver's license or passport to verify your identity.
- Taxable: A general-purpose investment account
- Joint: An account shared between two individuals
- Retirement (includes Traditional and Roth IRA)
- 529 College Savings
- Custodial: An account set up for a minor
Don't have a ton of money to invest? Look for a brokerage that supports fractional shares. This means you can purchase a portion instead of a full share. This allows you to invest in Roblox even if you only have $10.
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2. Fund Your Account
Once your account is created, you will need to fund it to start trading. Just link it to your bank account so you can transfer money. Depending on the brokerage, you may need to deposit a minimum amount to start trading.
Be sure to read through the terms and conditions of the platform before making any investments.
Now, you can start buying Roblox stocks.
3. Search for Roblox (RBLX)
Once you've funded your account and are ready to buy, search for Roblox stock using its ticker symbol RBLX.
The company should appear, along with Roblox's other relevant data, such as current stock price and daily average volume.
Click on the company listing for more detailed information, including news updates and analyst ratings. It's smart to research the company and consider any risks before investing.
4. Decide How Much You Want to Buy
The next step is deciding how much Roblox stock you want to buy. Most platforms will let you enter how many shares or the exact dollar amount you want to buy.
For example, if the investing app allows for fractional shares, you can say that you want to buy $50 worth of Roblox (instead of full shares).
After entering the details, you are now ready to place your order.
5. Place your order
Once you have entered all the information, review it one last time and click "place order" to complete your purchase of Roblox stock. Your order will be processed in a few minutes, and you will receive a confirmation when it has gone through.
- Market order: Execute the transaction now at the current market price.
- Limit order: Set a specific price at which you wish to buy. This gives investors more control. But if the stock never hits your price, the trade will never be executed.
After that, you can view your holdings in your account portfolio and track their performance over time.
Best Brokerages to Invest in Roblox
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- Sign up for an eToro account
- Deposit $100
J.P. Morgan Self-Directed Investing - Get Up to $700
- Get up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money.
- $700 when you fund with $250,000 or more
- $325 when you fund with $100,000-$249,999
- $150 when you fund with $25,000-$99,999
- $50 when you fund with $5,000-$24,999
- Get unlimited commission-free online stock, ETF, fixed income, and options trades when you open an account.
- $0 Online Commission trades
- Choose an account that's right for you: General Investing, Traditional IRA or Roth IRA.
- Access our secure, easy-to-use trading experience online or through the Chase Mobile® app.
- Our powerful tools and resources are built to help you take control of your investments.
INVESTMENT AND INSURANCE PRODUCTS ARE:
Pros and Cons of Buying Roblox Stock
Buying a stock is a commitment. It's important that you first weigh the pros and cons of investing in Roblox.
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Why invest in Roblox?
Roblox continues to grow in terms of its users and popularity. However, its profit started to decline in 2023. Let's take a closer look into the reasons why it's good to invest in Roblox.
- Strong User Base
Roblox continues to build its user base. They had 65.5 million users actively playing their games, a 25% increase from last year.[1]Most of the growth came from users outside the United States. This includes people with ages 13 years old and above.
- Growth Potential
Roblox has shown remarkable growth. And this shows possibilities for further expansion. Such growth may lead to an increase in the company's value, with potentially high returns.
However, the company has been losing money. They lost $268 million during the first quarter of 2023, which is equivalent to 44 cents per share.[2] In the same quarter of 2022, the company lost $160.2 million. That's 27 cents per share.
Even though they didn't make money, the number of Roblox users and the time people spent on the platform have increased significantly.
What is Roblox's valuation?
The market currently values Roblox at 17.16 billion.[3]
However, Roblox has a price-to-earnings (P/E) ratio of -17.95.[4]
- Companies with a P/E ratio above 30 are often labeled as "growth stocks." This suggests that investors predict future growth or profitability.
- A negative P/E ratio means the company is losing money. Some investors may still predict future growth, but this ratio just means present unprofitability.
- Positive P/E ratios below 10 are generally regarded as "value stocks" or underpriced stocks. This means investors see the stock price as lower than the stock's intrinsic value. It's like buying stocks at a discount.
The company is not generating profit. And this is a concern for potential investors. Investors generally prefer a positive or reasonable P/E ratios as that indicates the company has earnings that are in line with market expectations.
- Market Capitalization (Market Value)
Market capitalization (market value) is how we measure the size of a public company. We do this by multiplying the current stock price by the number of outstanding shares. - Price-to-Earnings Ratio (PE Ratio)
The P/E ratio shows if a company is undervalued or overvalued. A positive ratio means good earnings, while a negative ratio means heavy losses.
Is Roblox Stock right for you?
Whether Roblox stock is right for you depends on various factors. This includes your financial goals, risk tolerance, and investment strategy.
Here are some considerations to help you make an informed decision:
- Investment goals
Consider your investment objectives. Are you looking for long-term growth, short-term gains, or passive income?
Evaluate if Roblox aligns with your investment goals and expectations. - Risk tolerance
Assess your risk tolerance. Investing in individual stocks, including Roblox, carries inherent risks. The stock market can be volatile, and the value of stocks can fluctuate. Roblox stock may be an option if you have a higher risk tolerance and are comfortable with potential ups and downs.
Are you having second thoughts on Roblox stock? Or do you simply want to diversify your portfolio? Consider these alternatives.
Alternatives to Roblox Stock
Since Roblox is not making profits now, it would be wise to check out its competitors.
- Take-Two Interactive Software
Take-Two Interactive Software is a prominent gaming company that creates popular games such as GTA, NBA 2K, and Red Dead Redemption. Take-Two has a diverse range of games.These games are primarily designed for adults. This could lead to having more loyal users. In contrast, Roblox caters to a younger audience.
Take-Two has a strong foothold in the console and PC gaming market. This enables them to generate more revenue than Roblox, which is mainly focused on mobile devices.
- Sony Interactive Entertainment
Sony is a famous and reliable brand in electronics and gaming. Their PlayStation gaming console is very popular and loved by many people. They have many exclusive PlayStation games, which makes them stand out in the gaming industry.With their PlayStation gaming consoles and exclusive gaming titles, Sony has established itself as a notable presence in the gaming industry. This unique combination of hardware and software gives them an edge over Roblox. Roblox focuses only on online platforms and software.
Bottom Line
Before you dive into Roblox stock, here's a friendly reminder: do your research. This involves choosing a trustworthy brokerage account, depositing funds, making an order, and continually managing your investment.
It is important to stay up to date and regularly review your investment strategy to ensure it matches your financial goals. Remember that all investments come with risks, so you must analyze your finances thoroughly and seek professional guidance.
References
- ^ Roblox.Roblox Reports Second Quarter 2023 Financial Results, Retrieved 9/16/2023
- ^ Roblox.Roblox Reports First Quarter 2023 Financial Results, Retrieved 9/16/2023
- ^ Macroaxis.RobloxCorp Current Valuation, Retrieved 9/16/2023
- ^ Nasdaq. RBLX Price/Earnings & PEG Ratios, Retrieved 9/18/2023
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