SaltLight Capital, an investment management company, released its “SaltLight SNN Worldwide Flexible FR Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The Fund generated a return of +15.61% in the third quarter of 2024. This letter discusses the firm’s broad thesis regarding the game industry’s future. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
SaltLight Capital highlighted stocks like Roblox Corporation (NYSE:RBLX), in the third quarter 2024 investor letter. Roblox Corporation (NYSE:RBLX) develops and operates an online entertainment platform. The one-month return of Roblox Corporation (NYSE:RBLX) was 17.11%, and its shares gained 29.39% of their value over the last 52 weeks. On November 21, 2024, Roblox Corporation (NYSE:RBLX) stock closed at $49.35 per share with a market capitalization of $32.385 billion.
SaltLight Capital stated the following regarding Roblox Corporation (NYSE:RBLX) in its Q3 2024 investor letter:
“Roblox Corporation (NYSE:RBLX) has firmly established itself as the dominant player in user-generated gaming within Western markets. Meanwhile, Tencent has developed a similar ecosystem in China with its WeChat Mini-games platform. Owning both gives us a unique vantage point to assess the evolving landscape of user-generated gaming platforms globally.
At its recent investor day, Roblox set an ambitious target of reaching 10% of gaming content revenue, of which it estimates the total pool is around $180bn (for context, in the last twelve months, it made $4bn in bookings).
We think this will be a challenging target, but it will be positive for the business directionally. The reason is that Roblox has spent the last three years heavily investing in re-engineering its game platform to be high fidelity, performant and widely available across platforms. They also share economics with their creators to the point now that the absolute numbers in highly engaged games are enough to support a small game studio. The result is that the quality of games has materially improved, attracting additional engagement – particularly from older users…” (Click here to read the full text)
A person taking lessons through Roblox Education, expanding their knowledge and skills.
Roblox Corporation (NYSE:RBLX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Roblox Corporation (NYSE:RBLX) at the end of the third quarter which was 54 in the previous quarter. Roblox Corporation’s (NYSE:RBLX) third quarter revenue reached $919 million, a 29% year-over-year increase, exceeding the previous quarter’s guidance range of $860 million and $885 million. While we acknowledge the potential of Roblox Corporation (NYSE:RBLX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Roblox Corporation (NYSE:RBLX) and shared top stock picks from ARK Invest Stock Portfolio. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.