Roblox (RBLX -1.36%) shareholders lost ground to a declining market. The metaverse and gaming platform's shares fell 9% through Thursday trading, compared to a 2.8% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.
That move added to significant short-term losses for investors, with the stock down nearly 65% so far in 2022.
Roblox made a minor announcement this week that might have sparked more pessimism on the part of investors. It scheduled its second-quarter earnings report for August 9, turning shareholders' attention toward what could be a tough operating update.
Roblox's last monthly sales report showed that the platform is losing users and seeing weaker engagement following a demand surge in earlier phases of the pandemic. Spending is falling, too, as consumers prioritize other budget categories, like travel. Investors are concerned that these trends will impact sales and earnings growth for the upcoming earnings announcement.
The stock was likely more directly pressured by general worries about a potential recession on the way. Roblox's growth-stock status makes it susceptible to sharp declines when Wall Street's mood turns pessimistic, as it did again this week.
These types of short-term price slumps don't mean that Roblox's growth thesis is broken. The platform has valuable assets, including a large user base, that help position it well for growth in the wider metaverse entertainment space. The company has many ways to boost monetization, including through its recent addition of layered digital-clothing sales.
However, the next few quarterly reports might show bigger declines in user spending following a period of strong growth over the last two years. And investors are worried that growth will slow even further if a recession hits the global economy. Those concerns were enough to pressure the stock this week