🔳 What’s next for Roblox?

Roblox is an $80 billion business that has tripled in the stock market over the past year, become the target of a prolific short seller, and been the subject of intense scrutiny over concerns about kids’ safety on the platform.

And its CEO didn’t even mean to start a kid-focused company. It just happened along the way. 

• “When we started Roblox, the vision — the long-term vision — was: to what extent could we simulate 3D reality? It takes incredible technical innovation to get there. It’s very different than downloading a game. It’s very different than streaming video. It’s the fabric of the metaverse,” CEO David Baszucki told Sherwood News. “It just so happens, games overlap a lot with reality simulators.”

• It’s one of the hottest stocks, having garnered significant engagement from the retail trading crowd. Its shares have risen about 200% in the past year, far outpacing the S&P 500’s increase of 17% over the same time frame. 

• This spring, when the platform saw a new peak of 12.5 million concurrent players, a Roblox board member told us, “That is 173 NFL football stadiums, full, playing Roblox at the same time!” Since then, a spokesperson says, it’s hit 30 million concurrent players. 

• The company pulled in $3.6 billion of revenue last year, growth of 29% from the prior year. It has a goal of capturing 10% of the world’s video game activity; execs figure they’re at 2.4% right now.

Whether it will become a profitable business still remains to be seen. Roblox posted a net loss of $935.4 million last year, and it has yet to produce an annual profit — or even a single profitable quarter — since it went public in early 2021.

The Takeaway

Baszucki says Roblox is “less a game than a 3D social platform where you and your friends can pretend to be in different places.” With the end goal of reality simulation still a long way off, Roblox is working to hold on to a customer base that’s constantly aging away from the game — just 19% of Roblox users are over 25.

Read more.

• Tesla’s “biggest project of all time” (according to Musk) is falling behind schedule

Though Elon Musk has promised to make 5,000 Optimus robots by the end of the year, the project is reportedly facing engineering challenges. So far, only “hundreds” of the sleek black-and-white bots have been produced, many without hands or forearms as Tesla works on replicating the mechanics of five fingers. Ultimately, though, it seems like the market doesn’t really care. 

But the hardware might not even be Optimus’ biggest blocker.

• The US birth rate is at a record low

Despite Elon Musk’s best efforts, the fertility rate in the US is well below the birth rate required for a population to replace itself. As plunging fertility rates worldwide foretell an impending global baby bust, governments are experimenting with incentives to encourage citizens to have more children, like President Trump’s proposed $5,000 “baby bonus” for new mothers. In fact, government intervention may have helped the country with the world’s lowest birth rate rise for the first time in nine years.

See how America’s birth rate stacks up globally.

On Friday, the defense, data analytics, and AI business software firm hit a new all-time high, leapfrogging American corporate giants Home Depot and Procter & Gamble in terms of sheer size. (It’s already bigger than titans like Bank of America, Chevron, and Coca-Cola.) Over the past 12 months, Palantir has made its shareholders more than $300 billion richer. Is there still upside potential, or is the stock overvalued?

What the bulls say versus what the bears say