What happened
For the fourth trading day in a row, shares of online gaming platform Roblox Corporation (NYSE: RBLX) marched higher on Tuesday, topping an 8.5% gain by 3:30 p.m. ET.
It's not hard to figure out why.
Image source: Getty Images.
So what
To date, the big knock against Roblox is that "it's a kids game." While that was a plus when kids were quarantined from school and (allegedly) learning online last year, now that lockdowns and school closures are over for most schools in the U.S., there's a worry that Roblox may soon lose much of its audience.
Now, judging from last week's earnings report, that didn't seem to happen in the third quarter -- and it seems Roblox is taking affirmative steps to ensure it won't happen in the future. As the company announced yesterday, Roblox is setting up a "Roblox Education" division that aims "to support 100 million students learning on our platform by 2030" by "equipping educators everywhere with dynamic learning environments that bring to life educational content."
Roblox is also creating a $10 million fund dedicated "to bringing high-quality educational experiences to Roblox and to support educators in using Roblox Studio in their classrooms" and beyond that, leveraging its Roblox Studio to help teach "computer science, design, and development courses" to millions of kids.
Now what
In short, Roblox is going to school -- and it's taking what looked at first like a potential flaw in its business model and flipping it to reveal an opportunity to expand its business both within schools and without.
As a shareholder in the company myself -- and a parent who's marveled at the way Apple, for example, and its Mac computers and iPads have invaded my kids' schools already -- I have to say I'm excited about the possibilities and more than a little impressed to see Roblox taking a page from Apple's playbook.
This is the right move for the growth stock to make, to help fulfill Wall Street's vision for it.
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Rich Smith owns shares of Roblox Corporation. The Motley Fool owns shares of and recommends Roblox Corporation. The Motley Fool has a disclosure policy.
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