The recent success of Squid Game helped online entertainment platform operator Roblox (RBLX) grab the market’s attention. However, the company’s stock has declined in price over the past few months as schools have reopened and children have returned to outdoor activities. So, is it wise to buy the stock now, or is there further downside in the offing? Let’s find out.Ranked as one of the top online entertainment platforms for audiences under the age of 18, Roblox Corporation (RBLX) in San Mateo, Calif., made its stock market debut on March 10, 2021, via a direct listing. The recent success of the South Korean drama television series Squid Game played to the company’s advantage as thousands of global users have been playing ‘Red Light, Green Light’ in several game rooms dubbed ‘Squid Game’ on RBLX’s platform. In addition, it launched the first Roblox Listening Party on September 24.
However, the stock has declined 15.7% in price over the past month and 18.9% over the past three months to close its last session at $70.44.
Last month, the National Music Publishers’ Association (NMPA) settled a case with RBLX regarding its alleged illegal use of songs from numerous artists. Although the terms of the agreement were not announced, NMPA had claimed roughly $200 million in damages from the company in June 2021. Jefferies (NYSE:JEF) analyst Andrew Uerkwitz maintained a Hold rating in the stock but lowered the price target. Moreover, RBLX’s near-term prospects look bleak as schools reopen and children spend less time at home.