CE 100 Index Falls 2.5% Amid Roblox Stock Rout

The CE 100 Index sank 2.5% as even “fun” names fell amid a Roblox stock drop.

And headed into the final two weeks of what’s been a dismal year, the Index is 34.4% lower to date in 2022, outpacing even the tech-heavy NASDAQ, which has lost 31.7%.

The “Have Fun” pillar was down by 5.7% for the week, led by DraftKings, which slipped 13%, and by Roblox, which lost 12%. Netflix followed suit with a 9% decline through the past five trading days.

The ‘Fun’ Segment Falters

The decline in the “fun” segment may be illustrative of some of the concerns that come alongside a wealth of macro data points highlighting the pressures hitting consumers into the end of 2022 and beyond.

As has been well documented, the Federal Reserve is on track to keep on boosting interest rates, inflation is stubbornly high, and retail sales data indicates that people are pulling back on discretionary spending (we’ve seen the first decline in retail sales in 11 months, as measured in November and right into the holiday shopping season).

To that end, Roblox reported November data that shows slowing growth, as bookings were $222 million to $225 million for the month, which represents mid-single-digit percentage growth. A year ago, that growth had been in the double digits.

Roblox’s average bookings per daily active user were between $3.92 and $3.97, down 7% to 9% from a year ago.  Overall daily active users rose 15% from November 2021 to 56.7 million users, but that figure had been north of 30% a year ago.

Netflix’s slide came as reports debuted this past week that the streaming giant has been falling short of ad targets, as reported in Digiday, as members have not been signing up for the new ad tier offering as had been expected.

Beyond the confines of the leisure-oriented names, the “Move” segment was 3.7% lower for the week, led by Tesla, where the stock slipped 16%. CEO Elon Musk sold roughly 22 million shares for $3.6 billion during the week.

In the “Pay and Be Paid” segment, which was 3.5% lower, Affirm shares were 10.8% lower, extending losses the week after news came that Walmart reportedly plans to offer buy now, pay later (BNPL) through a ONE, the FinTech backed by the retailing giant. The installment payment option will join the checking accounts, savings accounts and debit cards already offered by ONE, which operates independently but is majority owned by Walmart, we noted at the time.

The retailer uses Affirm to offer a BNPL option to shoppers, and at the time of the news it was not known how a ONE offering would affect that partnership, per the report.

These losses were enough to offset the gains seen in names like DocuSign, which gained 14.4%. The company said in its latest earnings results that quarterly billings grew 17% year over year to $659 million. The company disclosed that during the quarter it saw approximately 10,000 direct customers to reach a total direct customer base of 202,000, a 26% increase over last year.