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Why Roblox shares fell 14% in July

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What happened

Actions of Roblox (NYSE: RBLX), a gaming platform, fell 14.5% last month, according to data provided by S&P Global Market Intelligence, as investors continued to look past so-called pandemic games and after the company’s shares received a sell note from an analyst.

So what

Roblox stock began to fall in mid-July after benchmark analyst Mike Hickey began covering the technology company with a target price of $ 75 and a sell rating on the stock.

Image source: Getty Images.

After Hickey issued his sell note, some Roblox investors were scared and lowered the company’s stock price by about 6%.

Investors have likely also sold Roblox recently, as the company was viewed by some as a good investment during the pandemic as more people were spending time at home during lockdowns and social distancing.

But as the U.S. economy has reopened and some social events and gatherings have returned to relative normality, investors have given up on some of their pandemic games.

Now what

Roblox stock rebounded slightly in August and is up around 5% this month. Some investors are starting to rethink their tech stock selling strategy due to the increase in COVID-19 cases, caused by the delta variant, across the United States

Roblox will release its second quarter results on August 16 and with the company still firmly in the growth mode, long-term investors may want to ignore some of the recent declines in stock prices and focus more on their original reasons for investing. in this fast. Growing gaming platform.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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