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.
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.
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.
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
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.
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.
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.
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.