Over the last couple weeks, I’ve noticed something interesting…my kids are unusually glued to their iPads. I’ve been away on an assignment over the last year and I am noticing more often than not they will cut a conversation short to go play a “game”. Every time I inquire as to what game they are playing, the answer is always the same, Roblox. So today on Twitter I decided to ask the general public, what am I missing about Roblox? The answers were flat out consistent. Which if you stay 10 minutes on Twitter you’ll realize that is a rare feat.
The answers were consistent: Kids love it, its addictive, and parents pay real money to keep their kids happily playing the game. Given that Roblox recently went public, I immediately went to the SEC Edgar Database to read the most recent corporate filing.
***On a sidenote if you haven’t been to the SEC Edgar Database and looked up corporate filings you’re wasting a great resource. If you want to get as close to an inside peek at a companies day to day operations, what management is thinking, and if they are getting creative with their accounting (remember numbers don’t lie), this is where you’ll find the information. ***
Today I looked at the 10-Q corporate filing. Corporate filings have different designations, but to get you up to speed Investopedia has a quick primer. Majority of the time especially if I am running low on time (which is all the time) I only read the Management Discussion & Analysis (MD&A) section. This section is the best way to find out whats currently going on with the company, how they make their money, any anticipated challenges, and what possibly lies ahead. In my opinion this is the most important section of quarterly and annual filings. If you read anything about a company, read this!
Today when I read the 10-Q for Roblox, I came across the following statement, “We generate substantially all of our revenue through the sale of virtual items on the Roblox Platform.”
So I went digging further and then learned that a virtual Gucci bag sold for $4,115 on the game. That same bag in real life is $3400 retail. And the first thing I thought is whatever Roblox is doing, they are doing it correct.
But it doesn’t stop there, thanks to an article by Michael Walsh (@ThinkIrreverent), I learned if you’re a developer, you can make a significant amount of money building games on Roblox.
So at this point I am basically asking myself what can’t Roblox do and why am I not invested in this company.
***PLEASE NOTE, I AM NOT A REGISTERED FINANCIAL/INVESTMENT ADVISOR AND NOTHING SAID IN THIS POST SHOULD BE VIEWED AS INVESTMENT ADVICE***
As always if you have questions or concerns regarding creating an emergency fund, investing, real estate, insurance, or planning for the future, don’t be afraid to speak with qualified financial advisor. Smart Asset has a great tool to find an advisor in your area or feel free to email me (contact@surgifi.com) to help you on your path to financial independence.
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