Roblox, once a key player in the metaverse space, is predicting a difficult 2024 as investors voice concerns about the company’s ability to achieve sustainable profitability.
Roblox, previously touted as a metaverse hub within the gaming platform space, is bracing for a tough year as its financial health continues to deteriorate, according to Sahil Alvi, an early Roblox backer and founder of Neuron Partners.
In an interview with Fortune, Alvi did not hide his frustration, noting that Roblox’s stock price is still far from the IPO price it achieved in the first quarter of 2021.
“We have watched stocks slump over the past two years. The leadership team doesn’t seem to have gotten the memo that times have changed and the market no longer rewards growth for growth’s sake.”
Sahil Alvi
Alvi did not elaborate on his company’s stake in Roblox, but he has publicly urged Roblox CEO David Baszucki to take the company private for weeks. In an open letter posted on LinkedIn in late November, Alvi cited issues with Roblox, saying the path to profitability “is not clear to the company.”
“(…) Perhaps taking Roblox private may actually be one of the solutions to stem the drain of shareholder value from Roblox stock.”
Sahil Alvi
Roblox has so far made no public comment on Alvi’s letter. The Neuron Partners founder said 2024 will be a very important year for the gaming company as the California-based company is left with almost $2.1 billion in liquidity. He added that company executives “need to get serious about generating revenue before the company starts to struggle.” “We are experiencing serious financial difficulties.”
“2024 will be an important year to look at whether management is transforming the company into a sustainable profitable business.”
Sahil Alvi
As of press time, RBLX is trading at $46.4, according to Google Finance data. The stock is up more than 66% year-to-date, but these numbers are still far from its all-time high in November 2021, as well as Roblox’s IPO, when RBLX was priced at $70.