These 2 Small-Cap Stocks Fell Hard Thursday

Thursday was a bad day for the stock market, as investors had a delayed reaction to the Federal Reserve's Wednesday decision to increase interest rates. In combination with other economic data, market participants grew more pessimistic about the economy's ability to withstand pressures that could send it into recession. That caused big losses for the Dow Jones Industrial Average (^DJI -0.98%), S&P 500 (^GSPC -0.46%), and Nasdaq Composite (^IXIC -0.64%).

Data source: Yahoo! Finance.

A couple of stocks stood out for even bigger losses than the overall market. Popular video game company Roblox (RBLX 1.60%) and vaccine manufacturer Novavax (NVAX -4.82%) were hit particularly hard on Thursday, and investors are looking closely at the two stocks to see if more damage might be coming.

Roblox has a tough November

Shares of Roblox dropped 16% on Thursday as investors had the chance to react to the video game platform provider's latest financial metrics for the month of November. Despite continuing  growth in some key areas, Roblox wasn't able to deliver quite the level of success that most shareholders had hoped to see.

Roblox's key metrics were mixed. Daily active users grew by 15% year over year to 56.7 million, and hours engaged were up by 10% to 3.9 billion hours. However, gains in sales were limited to just 1% to 3%, with the company estimating revenue of $190 million to $193 million. Billings had to deal with some headwinds as well, with an estimated range of $222 million to $225 million, representing 5% to 7% growth from year-ago levels.

When you put all those numbers together, what you get is a 7% to 9% drop in average bookings per daily active user, signaling that Roblox didn't get as much benefit from each individual customer as it had in the past. Foreign exchange fluctuations were responsible for about 4 to 5 percentage points of headwinds against bookings growth for the month, but even on a constant currency basis, average per-user bookings metrics would have been down 3% to 5%.

More problematic is the fact that daily user totals were down from October as well as from the average for the July to September quarter. Roblox is going to have to do a much better job of monetizing its customer base if it wants to get these key metrics moving back in the right direction.

Novavax gets a double dose of bad news

Meanwhile, shares of Novavax plunged 34%. The vaccine maker had to deal with reduced demand at the same time that it went to capital markets to raise cash.

Late Wednesday, Novavax announced plans to raise $250 million  through two separate  public offerings. One would be a straight sale of common stock, while the other involved selling convertible five-year senior notes. Both of the offerings raised some concerns among current shareholders about the possibility of dilution, particularly depending on how the pricing phase of the offerings goes.

Even worse, Novavax disclosed that its agreement with the U.K. government to supply COVID-19 vaccines got cut in half  from 15 million to 7.5 million doses. That forced the company to repay $112.5 million from the upfront payment it had already received in connection with the contract.

Novavax did reaffirm its full-year 2022 revenue guidance for $2 billion, but investors were still not pleased to see further weakness in its vaccine business. Given that Novavax was late to the game in getting its COVID-19 vaccine approved, shareholders have been counting on making the most of whatever demand is left for the biotech company's products.