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 popular on Wall Street used 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 renamed itself Meta, a move by management reflects its growing ambitions beyond social media and into the so-called metaverse.
Roblox endeavored to create a version of it since its creation in 2004Baszucki said in an interview with CNBC’s Jim Cramer on “Mad Money.”
“Our business plan from 17 years ago envisioned this new category where people can come together. Over the past 16 years, we have innovated in this category, creating an incredible community of not only gamers, but a community incredible developers – a solid 2 million which makes everything on our platform a rich economy,” said Baszucki, who also founded Roblox alongside Erik Cassel and went public via a direct listing in March.
“Our whole company is really focused on innovation to drive and guide this vision of what some people call the metaverse — or human co-experience — forward,” Baszucki added.
Baszucki’s appearance followed Roblox shares which jumped 42.23% on Tuesday to close at $109.52 apiece as Wall Street digested the video game company’s third quarter results from the night before. .
Roblox saw bookings of $637.8 million in the quarter, beating analyst expectations of $636.5 million, according to Refinitiv. This represented a jump of 28% compared to the same quarter in 2020. The average number of daily active users registered at 47.3 million in the third quarter, a year-on-year increase of 31%. .
The company, known for its popularity with children, took advantage of the coronavirus pandemic as people spent more time at home and turned to entertainment options such as the Roblox app. But because of this, there were questions about the sustainability of Roblox’s growth as Covid vaccinations rolled out, prompting individuals to more freely resume pre-Covid activities, including the widespread return to in-person schooling.
Some bearish investors bet against Roblox shares using a strategy known as short selling, as they expected the growth in bookings and engagement to moderate, especially as the company faced difficult year-over-year comparisons.
The fact that Roblox turned around in a surprisingly short quarter likely caused some short sellers to hedge their position, hoping to minimize losses, according to Cramer. He said those actions likely added upward pressure on Roblox shares, contributing to the stock price surging considerably on Tuesday.
In addition to its third quarter results, Roblox also announced on Monday that it saw a strong start to its fourth quarter from October before its platform was hit by a multi-day outage. Baszucki told Cramer he believes the third quarter numbers, combined with early October metrics, “validate our vision for the platform we’re building.”