Roblox is a better metaverse play than Facebook - Tao Value

Oct. 28, 2021 2:31 PM ETRoblox Corporation (RBLX)METABy: Brian Stewart, SA News Editor77 Comments

Roblox Developer Conference 2019

Ian Tuttle/Getty Images Entertainment

  • Tao Value revealed in a letter to investors that it has opened a position in Roblox (NYSE:RBLX), saying the gaming company has the ability to become "a new being for human society."
  • The fund also blasted Facebook (NASDAQ:FB) and its founder Mark Zuckerberg for putting users and shareholders at risk by engaging in "blatant negligence" for ignoring internal data that showed that some of its policies had toxic consequences.
  • "Based on records made public thus far, I believe Facebook proved that it did not put its stakeholders' trust and wellbeing as a priority, thus [is] not a good social platform," the firm said in a fund letter released this week.
  • Earlier on Thursday, Facebook (FB) announced that the company was rebranding as "Meta" to better reflect its commitment to the metaverse. In an appearance at the Facebook Connect conference, Zuckerberg outlined the company's strategy, including moves into office, fitness and games.
  • Tao Value pointed to RBLX as a better player in the metaverse space, calling it "a good social platform" that "put stakeholders’ trust and security first."
  • Tao praised the company's management and stressed its potential to branch out from its current core business of games.
  • "Roblox appears to be a great business undervalued to near term profitable visibility, who also has long term optionality," the fund said.
  • RBLX came public in March through a direct listing, carrying a reference price of $45. The stock rallied to a high of $103.87 by June but quickly came off those levels.
  • Since then, shares have seen choppy trading, generally moving sideways. In Thursday's intraday action, the stock dipped less than a percent to $80.27 at about 2:15 PM ET.
  • Meanwhile, FB gained steadily through much of the middle of the year to reach a 52-week high of $384.33 in early September.
  • However, shares have taken a haircut lately in the wake of its recent scandals. On Thursday, the stock was up 2% to $318.39 at about 2:15 PM ET.
  • Comparing the two stocks that Tao pitted against each other, RBLX and FB have traded leadership over the course of 2021. At this point, the stocks are showing comparable gains year-to-date, with both slightly underperforming the broader market:

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