Chart of the Day: Roblox

All right. Our chart of the day is Roblox. Those shares are tanking after the company cut its annual bookings forecast. Friend talking to and she owns it. She joins us now on the phone. So what’s your take and what, if anything, are you doing with the stock today, Brynn? Yeah, thanks, Scott. Well, first of all, the stock is trading down like a Snapchat quarter, right? It’s just you know brutal and we’ve already seen a slight recovery since the market opened. They think from a trading perspective, you know my rule of thumb I think is a general rule of thumb when you get a big pull off, pull down like this, if you really want to wait till day three, you’re probably going to get a sell off today, maybe sell through Friday. The sellers will be out and then Monday will be the time which I will be adding. I definitely think there was an overreaction. The reaction should have been negative by the way because they did come in and say verbatim we’re going to make the difficult internal decision to adjust booking guidance. And so there was somewhat dramatic about that even though they said for 2025 through 2027, they’re still expecting bookings of 20%, which is what the street was wanting. I don’t want the what you just said to get buried within this. You just said you’re going to be adding to the stock. You think on Monday. Yes, yes, I mean it when we, when you read the numbers and listen to the excitement, I mean so they had daily active users up 17% to 77 million, bookings went year over year at 19%, not that key 20 and revenue growth was 22%. I think that’s something that investors should also pay attention, is that this company has really started having operating leverage. And they mentioned it, most mentioned it multiple times. Free cash flow went from 82,000,000 last year to 191,000,000. And so they’re being smart about CapEx. They mentioned this operating leverage. And they’re also having just the beginning of huge growth in India. They already have good growth in Japan. And so I think this is an overreaction and what we’re seeing in this type of market that would be a good entry point over the next few quarters. OK, Josh, you have some history here. You sold this roughly 2 years ago, not as much since. This was. This was atrocious for me. I think that I think the thing about Roblox that’s so attractive is what a hold they have on that generation and the the the amount of spending that takes place on that platform is very real. I think the difficulty here, why I lost money on it and why Bryn is suffering with it today, it’s just very lumpy. It’s very unpredictable. It hasn’t been a public company for 10 years. We don’t really have a sense of when they pull lever A, we get result B. It’s just not that simple to figure out quarter to quarter. So I think if you’re going to be here, you almost have to decide I’m going to be a long term investor because I think the monetization of the platform is going to outgrow this lumpiness that seems to impact every earnings quarter. I think Brynn would probably agree with that. Brynn, last point to you. Yeah, I mean I think, I think Josh is spot on. You know, this is not a Microsoft or an Apple, but I think the stickiness of the platform and these daily active users continuing to grow, the global expansion is real by the way. And so I think look through the quarter, take advantage of the opportunity. I think A2 handle or low three handle is a great entry point. OK. We’ll see how the rest of this day finishes out and let us know when actually you do buy more shares, if you would. And thank you very much for calling in and talking about this stock today. Tough one, obviously down about 20%. Brent Talkington, thank you.