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Why Roblox Stock Popped Again on Friday

By Rich Smith – Nov 19, 2021 at 4:09PM

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Nike announces Nikeland -- and Roblox shareholders cheer!

What happened

This would be getting boring if it weren't so exciting. On Friday, for the seventh straight trading day in a row, shares of online gaming platform Roblox Corporation (RBLX 0.76%) churned once again higher, notching a 6.6% gain as of 3:15 p.m. ET.

The reason, in a word: Nikeland.

Nikeland avatars on display.

Nikeland avatars on display (and presumably for sale). Image source: Nike.

So what

Never heard of Nikeland, you say? There's a reason for that. As Nike (NKE 0.56%) announced in its press release yesterday, Nikeland is an entirely "bespoke world" on the Roblox gaming platform and "a new place on Roblox for Nike fans to connect, create, share experiences and compete."  

It's a place on Roblox where fans of the sportswear brand can gather to "participate in games such as tag, the floor is lava, and dodgeball with their friends" -- or "design their own mini-games from interactive sports materials."

Now what

More importantly to investors, Nikeland is presumably a new revenue stream for Roblox. Although neither Nike nor Roblox divulged the financial specifics on their new relationship, you've got to figure that there's some serious advertising spending going on here, with Roblox being the beneficiary. And if Nike is selling Nike virtual merchandise within Nikeland (as seems logical), then you can expect Roblox will be taking a cut of that, too.  

Is this the future for Roblox? Is it a foreshadowing of what investors can expect to happen as companies like Roblox, Microsoft, and Facebook -- er, I mean Meta Platforms -- build out the concept of a "metaverse" in which consumers spend more money than ever online?

Yes. I suspect it is that, too -- and that's probably good news for Roblox stock.

Rich Smith owns shares of Roblox Corporation. The Motley Fool owns shares of and recommends Nike and Roblox Corporation. The Motley Fool has a disclosure policy.

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