Roblox founder and CEO David Baszucki told CNBC on Tuesday that the online gaming platform’s business plan from nearly two decades ago called for the rise of the metaverse, a growing term. most used on Wall Street to describe interactive and immersive virtual worlds.
The idea has garnered a lot of attention in recent weeks after the company formerly known as Facebook rebranded itself as Meta, a management move said it reflects its growing ambitions beyond social media and in the so-called metaverse.
Roblox has been working to create a version of it since its formation in 2004, Baszucki said in an interview with CNBC’s Jim Cramer on “Mad Money.”
âOur business plan from 17 years ago called for this new category where people can come together. Over the past 16 years, we have been breaking new ground in this category, building an incredible community not only of gamers, but a community. of amazing developers – 2 million strong that makes everything on our platform a rich economy, “said Baszucki, who also founded Roblox alongside Erik Cassel. He went public via direct listing in March.
âOur whole business is really focused on innovation to advance and guide this vision of what some people call the metaverse – or human co-experience -â added Baszucki.
Baszucki’s appearance followed the rise in Roblox shares by 42.23% on Tuesday to close at $ 109.52 apiece, as Wall Street digested the video game company’s third quarter results the night before.
Roblox recorded bookings of $ 637.8 million in the quarter, beating analysts’ expectations of $ 636.5 million, according to Refinitiv. This was a 28% jump from the same quarter in 2020. The average number of daily active users was 47.3 million in the third quarter, a 31% increase year-over-year .
The company, known for its popularity with children, capitalized on the coronavirus pandemic as people spent more time at home and turned to entertainment options such as the Roblox app. But for this reason, questions were raised about the sustainability of Roblox’s growth as the Covid vaccinations roll out, prompting individuals to resume pre-Covid activities more freely, including the widespread return to schooling. in person.
Some bearish investors bet against Roblox shares using a strategy known as short selling as they expected moderate growth in bookings and engagement, especially as the company faced difficult year-to-year comparisons.
The fact that Roblox had a surprisingly short quarter likely caused some short sellers to hedge their position, in the hope of minimizing losses, according to Cramer. He said those shares likely added upward pressure on Roblox shares, contributing to the stock price’s significant rise on Tuesday.
In addition to its third quarter results, Roblox also announced on Monday that it had a good start to its fourth quarter from October before its platform was hit with a multi-day outage. Baszucki told Cramer he believes the third quarter numbers, combined with the early October metrics, “validate our vision for the platform we are building.”