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Roblox set for worst one-day drop as discovery changes hurt in-app spending
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July 31 (Reuters) - Roblox shares plunged nearly 30% on Friday, set for their worst one-day decline on record, after the gaming platform forecast a sharp drop in bookings, stocking concerns that recommendation algorithm changes could further pressure near-term spending.
If losses hold, Roblox is on track to erase more than $10 billion from its market value, which stood at about $34.9 billion before the selloff.
• Roblox said on Thursday it revamped its recommendation algorithm to prioritize games with stronger long-term retention over "cash-grabby" titles focused on short-term spending, hurting bookings as users shifted toward less-monetized experiences.
• The changes led second-quarter bookings to the low end of Roblox's forecast range at $1.56 billion, with executives cautioning that monetization weakness could persist in the current quarter.
• Roblox forecast its first quarterly bookings decline in four years, expecting a 14% to 18% year-over-year drop in the third quarter, compared with LSEG-compiled estimates for roughly an 8% decline.