What’s the Forecast for Roblox Stock As Users Fight Its New Terms of Service?

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Oct. 6 2021, Published 11:21 a.m. ET

For Roblox content creators and users, a regular terms of service update has turned out to be more contentious than they had expected. As a public company still in its first year on the market, Roblox (NYSE:RBLX) has had its fair share of volatility. However, the terms of service argument is sending its stock into correction.

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The forecast for Roblox stock depends largely on how the company responds to concerns. Anyone with a RBLX position should pay close attention.

What to know about Roblox's new terms of service

It wasn't until people started to dig into Roblox's newly released terms of service that things started to seem fishy. Hidden amid the wall of text were numerous statements that brought concern.

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Previously, creators would host sweepstakes, giveaways, and other lottery systems for Robux (the official Roblox currency). Now, players offering Robux through these methods face being banned. Additionally, players can no longer get paid for modeling new assets (a term of service that was clarified after its initial wording confused users).

Using VPNs (virtual private networks) is now also a bannable offense. An estimated 31 percent of internet users worldwide have used a VPN to help keep their IP addresses and locations private. Still, Roblox is trying to weed out illicit behavior in its community.

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Users are upset about these changes because they limit engagement and privacy. Roblox has already adjusted some wording to help clarify its intentions, but we've yet to see how the company will resolve the larger issue.

RBLX stock responds to the upset

In the day-and-a-half after markets close on Oct. 4, RBLX stock fell as much as 7.91 percent. As of the morning of Oct. 6, its shares had regained 1.46 percent but remained volatile.

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RBLX shares are just over $73 each, a healthy 5.05 percent above their opening price following its IPO on Mar. 10. However, the stock peaked at just below $100 a share in June 2021, meaning the current value is 26.89 percent below the stock's peak.

Roblox sentiment on Stocktwits wavers

Over the last day, sentiment for Roblox has fallen 8.33 percent, according to Stocktwits. Investors are torn about the stock's long-term potential, with some suggesting it will bounce back to the $100 range. Others say the risk is too much to bear.

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A forecast for Roblox stock

Analysts largely agree that Roblox shows potential over the next 12 months. CNN Business analysts' median target price implies a 24 upside by this time next year. However, that doesn't take the current issue of users vs. platform into consideration.

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The reality is that players will likely continue to hold Roblox accountable and fight for the terms of service they really want. Whether that will mean restructuring the terms or simply rewording them, Roblox will have to do something to retain shareholder value and user revenue.

As for all the people who thought no one reads the terms of service, the Roblox community is here to prove you wrong.

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