Roblox sinks 25% after the metaverse maker's quarterly results miss Wall Street's expectations

• Roblox shares tumbled 25% on Wednesday after a shortfall in fourth-quarter results.
• The gaming platform and metaverse proxy lost $0.25 a share, wider than an expected loss of $0.13.

Shares of Roblox quickly shaved off a fourth of their value Wednesday after the gaming platform and metaverse proxy turned in fourth-quarter earnings and bookings that fell short of what analysts had anticipated.

The stock lost as much as 25% in hitting $55, the lowest price in nearly three weeks, with volume heavy at more than 31 million shares exchanged less than an hour into the regular trading session.

The company, whose platform allows users to create immersive games, late Tuesday posted a loss of $0.25 a share. That was wider than a loss of $0.13 a share expected in a consensus estimate from Refinitiv. A year ago, the company lost $0.30 a share.

Bookings came in at $770.12 million compared with an estimated $772 million. Investors watch bookings as the company sells its Robux virtual currency that can be used to buy upgrades to enhance gameplay, such as accessories for avatars. Bookings did increase 20% from $642.3 million a year ago.

Average daily active users rose by 33% to 49.5 million during the period ended December 31.

"As we look ahead to 2022, we will continue to develop our technology to enable deeper forms of communication, immersion and expression on our platform," David Baszucki, Roblox's CEO, said in the quarterly-results release.

Last week, the company said it had launched metaverse game "NFL Tycoon" ahead of Super Bowl LVI. The game gives users a space to socialize virtually and engage in activities beyond playing football, such as managing a team.

On Monday, Bank of America reinstated coverage of the company with a buy rating calling the company the leader in the emerging metaverse category.

"Roblox appears to have the only fully fledged metaverse product on the market," BofA had said, adding that the shares weren't reflecting the company's leadership or category prospects.

The stock had lost about 29% on a year-to-date basis through Tuesday's session.