Roblox extends Friday's slide a

Summary

Roblox extended Friday's decline as the hosts discussed Jefferies' concerns about bookings, slower growth, and cash flow pressure. They linked some of the slowdown to platform safety measures and expressed a cautious near-term outlook, suggesting bullish investors wait for signs of improvement.

• Jefferies' follow-up commentary added pressure after Friday's downgrade-related decline.
• Jefferies' price target was cited at $38, versus shares moving from roughly $46 to $43 that morning.
• The hosts cited Jefferies' expectation for Q3 bookings to decline 14–18% year over year.
• Safety measures addressing risks to young users were described as slowing growth.
• Cash flow pressure was highlighted as another concern.
• Pete suggested bullish investors stay away for now and said further downside was possible.
• Buying puts was mentioned as a potential bearish approach, not as a disclosed trade.

1. 0:00

   Let's wind it up with Roblox, Pete.

2. 0:02

   These guys Jefferies cut them on booking concerns. That was Friday and the stock was down. Well, it's down today because the Jefferies put out more on that note, Pete. Basically talking about things like Yeah, they have addressed so it's a

3. 0:21

   gaming platform. It's also a creation platform. And a lot of the people who use this platform are quite young. In other words, uh there have always been questions about well, do you really want your kids on the Roblox platform? Could there be predators there? Could there be communications

4. 0:40

   with your kid through the platform and so forth not just he or she building you know, their own imaginary world or whatever gaming world. Well, so they've put in some stop gaps to address that, Pete. But some of those have slowed the growth of the company pretty

5. 0:58

   dramatically and that's what Jefferies was worried about it sounds like, Pete.

6. 1:03

   >> Yeah, Jefferies says that their price target is 38. Well, the stock started off this morning at 46 and now it's closer to 43. So, uh you know, it's moving in the wrong direction. It's moving in the right direction if you're listening to Jefferies who seems to be on top of this pretty well, John. They also talked about bookings for Q3 being

7. 1:22

   down anywhere between 14 and 18% year-over-year. So, that's another negative. They also have cash flow pressure. That's another negative.

8. 1:30

   So, I don't know. Unless you're somebody who wants to play things from the other side and and playing for the downside.

9. 1:36

   In other words, you know, buying puts or something like that. Um this is one of those where I think if you're bullish, uh it's a no touch for right now. I think you'd want to stay away for a while. Keep an eye on it maybe to see if there's any any changes, but uh just about everything negative that Jefferies is talking about seems to be

10. 1:56

    um grabbing people's attention right now. So, the positive side is not there and I think they might have a little bit more room to the downside.

11. 2:05

    >> Yeah. Yeah. I mean, it made a nice rally after earnings, Pete, and then people used that as an excuse to or you know, had just been crossing their fingers and hoping and when it opened up then they just said, "Yours." You first gave it to them with both hands.

12. 2:21

    >> Yeah.

Transcript from the show's YouTube captions; automatic captions may contain errors. Educational content, not investment advice.