This is Why Roblox Shares Came Tumbling Down in Tuesday’s Session

Online gaming platform company Roblox saw its shares slide on Tuesday after the company reported a decline in users and their spending in the month of May.

The stock dropped as much as 7.1% in after-hours trading. Shares had been in the positive at the close on Tuesday after App Annie reported that the Roblox app was the highest-grossing mobile game for the first quarter.

According to Roblox, daily active users for May were 43 million, down 1% from the 43.3 million it reported for April. Daily active users were up 28% from May 2020.

Roblox said that average bookings per DAU are estimated to be between $5.02 and $5.09. This is roughly a 3% drop compared to a year ago.

The company also revealed that users spent 3.2 billion hours in the game in May and revenue is estimated to be between $149 million and $151 million.

The company relies on players buying digital items in the game, which is free to download and start playing. Roblox is available on multiple platforms, including iPhones and Android devices, and is most popular with children and teenagers.

Truist Securities analyst Matthew Thornton said bookings look “softer than expected,” though he noted that Roblox has said that May metrics are typically down month over month, while June metrics are usually up.

It was this March that the company went public in a direct listing. The stock has doubled since then.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.