Roblox's non-target audience
We're still reeling from Wednesday's appalling attack on the US Capitol. But White House resignations and calls to remove President Trump from office via the 25th amendment didn't fluster investors, who were looking ahead.
Stocks notched record highs yesterday, as Congress confirmed Joe Biden's election. The Nasdaq soared past $13K for the first time. And Bitcoin deserves a full story...
Off the (block)chain... Yesterday, bitcoin topped $40K for the first time, more than doubling in value in the span of a month. The record price pushed the total value of the cryptocurrency market above $1T (also a first) — bitcoin makes up around $700B of that, and has nearly 5X'd over the past year.
Call it institutional FOMO... Bitcoin was launched by the mysterious "Satoshi Nakamoto" in 2009. But it really took off in late 2017, when it tripled from September to December — but then fell back down to earth. That rally was mainly driven by individual retail investors (and their FOMO). This time around...
Bitcoin's superpower = anti-inflation... While bitcoin tends to be volatile and crash-prone, some investors see it as a hedge in case the US dollar loses too much value and prices soar (aka: inflation). ICYMI: The Fed’s money printers have been blasting out dollars to inject back into the economy. More dollars = less demand for dollars = less valuable dollars = potential inflation — oh, and the national debt is at $27.7T. Meanwhile, bitcoin's supply is capped: today, about 18.5M bitcoins have been mined out of the 21M that will ever be created (by 2140). But in theory, cash can be printed endlessly, increasing the risk of inflation.
Diamonds on my Roblox... Online gaming company Roblox just raised $520M from private investors ahead of its public debut, leveling it up to a $29.5B valuation — that's more than 7X its February 2020 valuation. If you haven't heard of Roblox, that's probably because you're over the age of 15. It's basically the YouTube of user-created games, except it also lets you play/chat with friends. Roblox launched in 2006, but exploded in 2020:
But how does it make those Ro-bucks?... With Robux. While games are free, kids pay for virtual currency to upgrade their avatars or get super powers. When someone spends in-game, Roblox gives a 24.5% cut to the game's developer. In exchange for all of that content, Roblox shoulders the app store and cloud hosting costs, providing a free (popular) platform to develop games.
IPOs are losing points... Roblox was planning to go public through a traditional IPO. Then it watched Airbnb and DoorDash shares open on the stock market at roughly double their IPO prices, and said "no thanks." Companies that are going public only raise money when they sell to VIP investors in the IPO — so Airbnb and DoorDash didn't benefit directly when their shares soared post-IPO (if anything, they lost out). So Roblox has chosen to use a rare Direct Listing, where no new shares are created. This cheaper, faster option is becoming more common as IPOs lose favor.
Authors of this Snacks own shares of: Moderna