By Dhirendra Tripathi
Investing.com – Video games may be at the heart of their business but shares of Roblox and GameStop (NYSE: GME ) were reacting to different scripts in Monday's trade – the former getting a thumbs up all around and stakeholders being told to dump the latter.
Roblox shares rose more than 5%, extending their recent gains on top of several analysts rating it a buy. GameStop fell 10%.
On-platform bookings remained strong through March and M Science expects it to deliver a Q1 beat, according to a note issued Thursday.
Last week, BofA initiated Roblox coverage with a buy and a $78 target, just $2 away from its current price. Stifle raised the target for the stock last month to $85.
Cathie Wood’s ARK Next Generation Internet ETF (NYSE: ARKW ) owns the stock. Roblox has more than 32 million daily average users on its online platform that allows them to program games and play those created by other users. Roblox is free to play, but there are in-game purchases available.
But the day wasn’t proving to be a great one for GameStop, the darling of the Reddit gang, after Ascendiant Capital Markets analyst Edward Woo downgraded the stock to sell from hold. He set a new price target of $10 from $12 earlier, saying the company’s fiscal year 2021 outlook is "hazy."
Price targets for GameStop and its actual share price haven’t had a great correlation last few months, what with an almost 4000% rise in a year in the stock price of the video game retailer. The stock has been at the heart of the battle between Reddit followers, ‘WallStreetBets’ on one hand and the big institutional guys on the other. With a mix of egos and big money, analysts argue that the stock’s drive carries no fundamentals, amply reflecting in Woo’s target.
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