Friday's Headlines: Roblox Falls on Disappointing Month
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Align Technology (ALGN) +3.1%
PagerDuty (PD) +1.4%
Trip.com Group (TCOM) +0.6%
Tesla, Inc. (TSLA) +0.6%
RH (RH) +0.2%
Moving Down ⬇️
Farfetch (FTCH) -11.6%
Eventbrite (EB) -11.2%
Bill.com (BILL) -9.0%
Spotify (SPOT) -8.8%
Netflix (NFLX) -8.6%
Roblox Falls on Disappointing Month 🕹
On Thursday, Roblox released its November business update and left investors unsettled.
Estimated bookings for the month were between $222 million and $225 million, representing growth of 5 to 7%. However, in the same month last year, bookings jumped by more than 22%. Management was quick to point out that some of the company’s underperformance was down to the strong dollar.
The gaming platform saw average bookings per daily active user fall by more than 7% to between $3.92 and $3.97. At the same time, daily active users were up by a mere 15% due to strong comps from the year prior. In 2021, Roblox typically saw user growth in the mid-30% range.
Roblox’s stock is down more than 15% on the news.
Netflix’s Ad Business has a Bumpy Start 🎥
Yesterday, shares in Netflix fell by more than 8% after the digital publication Digiday uncovered the company was refunding some of its advertisers due to disappointing performance on its ad-supported service.
According to the report, Netflix’s ad-supported tier hasn’t yet captured the audience it promised to its advertising partners. So far, the seven-week-old service has attracted roughly 80% of the users initially anticipated. As a result, Netflix is offering refunds on adverts yet to run under its “pay on delivery” policy. Essentially, in an effort to gain customers for its newly unveiled ad space, Netflix will only charge an advertiser based on the number of viewers who actually watch their ad.
That being said, many of Netflix’s partners are refusing refunds and instead rolling their ad spend over to the beginning of next year in the hopes the service becomes more settled and gains more viewers.
It was also reported that Netflix was forced to lower the cost of its advertising to stay competitive with Disney+. Initially, Netflix was charging $65 for every 1,000 viewers while Disney was charging $50. However, the home of ‘Squid Game’ recently revised this figure to $55 per 1,000 views.
After Thursday’s decline, Netflix is now down more than 50% for the year but is still up 60% from its May low.
Amazon Goes After TikTok and Pinterest with New Product 📱
Amazon has begun testing a short-form video and photo feed within its existing shopping app. The feature, called Inspire, is meant to emulate the experience of organically discovering products on TikTok or Pinterest. Many analysts believe this kind of shopping may be the answer to the rapidly shifting online advertising space.
However, officials from Amazon were quick to clarify that the new feature is distinct from existing social media apps. For one, Amazon is building out an Amazon Influencer Program which aims to make it easier for content creators and influencers to gain partnerships, review goods, endorse products, and direct shoppers on where to buy. This is reminiscent of the exploding live-stream shopping trend in China.
That being said, comments from Oliver Messenger, director of Amazon Shopping, still reflect the looming influence of TikTok.
According to Messenger:
“You can create, cite your hobbies or types of things you’re into – and your feed will learn from that. It’s also deliberately not streamlined in the sense that we’ll show you content that you maybe didn’t expect from a range of brands, creators, and customers in line with those interests, but it’s content that you may not...have found yourself.”
That sounds an awful lot like the TikTok algorithm.
Time will tell if Western shoppers want this kind of direct shopping content or if they’d prefer it hidden within a wider social media.