Two Shares One To Buy And The Other To Sell With The Opening Of The Markets: Roblox, Zoom Video

While stocks on Wall Street rebounded after a sharp drop on Friday, the major indices completed a volatile week with investors continuing to assess the impact of the strong rise in bond yields.

While the blue chip completed the week with an increase of 1.8% and 0.8%, the technology-weighted decline was more than 2%.

Dow: S&P: NASDAQ 300 Minute Chart

Dow: S&P: NASDAQ 300 Minute Chart

With quarterly reports from high-profile companies and key economic data, the next week is expected to be busy for Wall Street.

Whichever direction the market moves, let’s take a closer look at a stock that is likely to be in demand in the coming days and a stock that may experience additional decline.

However, it should not be forgotten that our time frame is limited only for the next week.

Share to be purchased: Roblox

Roblox, which operates a very popular online platform that allows users to develop and play games, will be on the agenda with its long-awaited public offering at the New York Mercantile Exchange on Wednesday, March 10.

Founded in 2004, the San Mateo, California-based digital entertainment platform will go public with a direct listing of its shares, similar to names such as Palantir (NYSE :), Slack (NYSE :), and Spotify (NYSE :), after postponing its going public plan last month.

The company, which will be traded under the ticker ‘RBLX’, plans to issue a total of 198.9 million shares.

Although it did not specify a pre-listing price range, Roblox sold nearly 12 million convertible preference shares in a private issue in January at $ 45 per share. A listing at this price gives the company a market value of about $ 29.5 billion, compared to its valuation of just $ 4 billion last year.

Roblox Statistics

The game platform recently announced that revenue reached $ 923.9 million, an 82% increase over the previous year, for the year ended December 31, while registrations, one of the key metrics for the company, more than doubled to $ 1.9 billion.

Additionally, the number of daily active users (DAUs) of the platform, which is mainly children and teenagers, increased by 85% last year to an average of 32.6 million. These users spent a total of 30.6 billion hours on the platform, which is a 124% year-over-year growth.

Still, Roblox is not yet profitable; The loss increased from $ 71 million in 2019 to $ 253.3 million last year. This loss was largely driven by an increase in infrastructure, security, sales, marketing, and research & development spending.

Looking ahead, the company predicts that its revenue will double in the first quarter of 2021 and the number of daily active users will grow by 59-68% compared to last year.

Stock to Sell: Zoom Video Communications

After losing close to 10% in value over the past week, Zoom Video Communications (NASDAQ 🙂 shares are likely to continue to be under pressure in the coming days due to the ongoing effects of some negative factors affecting the company.

The ZM stock closed the Friday session at $ 337.43, giving the San Jose, California-based company a market value of approximately $ 95.9 billion.

Zoom’s shares, seen as one of the biggest winners of the COVID-19 outbreak, have now declined almost 43% since the historic peak of $ 588.84 on October 19. Despite the recent sale, the stock is still up about 195% in the past year.

ZM Daily Chart

Sentiment towards the company was hit as investors moved from technology stocks that rallied throughout the epidemic to circular stocks that would benefit from the reopening of the economy.

Given the progress on the vaccination front, this trend will likely continue in the next week, as the number of states to relax restrictions and bans will likely increase.

Another concern: Zoom experienced a sharp downside reversal, despite posting its history posting last week’s earnings per share and revenue up 713% and 369% respectively.

Following the initial surge right after the broadcast, ZM shares slumped, with worries that employees will lose some of the backwinds that they benefited during the period of COVID-19 restrictions as employees return to their offices in the coming months.

ZM Daily Chart & 200-Day Moving Average

ZM Daily Chart & 200-Day Moving Average

In addition, with investors increasingly moving away from companies benefiting from the stay-at-home period, technical indicators also point to more selling pressure ahead, after ZM stocks closed below the key 200-day moving average for the first time since it went public in April 2019.

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