A relatively new gaming company is getting a major shot in the arm from one of the biggest names in exchange traded funds.
Reuters reports today that Roblox (RBLX), a popular gaming app with 37 million daily users, has just gotten impressive buy-in from the Ark Next Generation Internet ETF or ARKW from Ark Invest, that acquired 500,000 shares of Roblox within the past market cycle.
Roblox, which was started in 2004, was based on the partnership of David Baszucki and Erik Cassel, and Basucki’s experience in the world of venture capital. Cassel died of cancer prior to the company going public, which it did just days ago, near the pandemic anniversary in which Americans hope and pray that re-opening heals some of the economic wounds imposed during the past year.
As Reuters staff mention in current coverage, one of the big reasons for RBLX gains is that the company offers remote gaming in a time when people are so often stuck at home. Specifically, the Roblox platform is wildly popular with school-age children, as parents of nine or ten year old progeny will tell you if you ask.
Getting in on gaming seems to be a broader strategy for Catherine Wood’s suite of Ark funds that are looking for innovative disruptors. Another Ark ETF, the Ark Innovation Fund (ARKK), recently bought 700,000 shares of Draftkings.
As for Roblox, Reuters cites a 20% gain and an additional 12% gain, although a look at the stock chart shows that RBLX has moved to $73 from around $69 at open earlier this week…
Reuters further reports that Ark sold Facebook while acquiring the Roblox shares.
“ARK Invest on Wednesday also sold a little over 67,000 Facebook shares from the ARKW ETF,” an anonymous author reports, “amounting to about 0.3% of the ETF’s assets.”
Will Ark benefit from its big investment in gaming? Proponents cite Catherine Wood’s prior success in predicting large stock moves around Tesla’s electric vehicle operations. Check out ARKK and related funds to see where this sector is moving as we gear up for a greener year.