U.S. retail giant Walmart (WMT.US) yesterday informed investors of a deal with Roblox (RBLX.US) and the opening of two immersive experiences in the virtual 'metaverse' space. Shares of both companies are gaining ahead of the opening:
- Walmart said the decision to join the metaverse is driven by trends among the company's youngest generations of customers, and highlighted the role of the pandemic, which has resulted in a continuing trend of sales in the virtual space;
- The company wants to attract the attention of Generation Z (born after 2010) to virtual reality and believes that through product familiarization, consumers will return the favor in the future by preferring the 'met early' shopping network;
- The open world of 'Walmart Land' will be supported by actor Noah Schnapp, recognizable in the popular Netflix series 'Stranger Things.' The world will provide virtual music festivals, with popular artists, and virtual products, mirroring goods available in real WalMart stores and advertised by popular influencers. The second 'Universe of Play' world will provide a platform for younger players, featuring characters and heroes from WalMart's flagship 'holiday' and entertainment products;
- Roblox was chosen because of the 'record amount of time' spent in the platform by players. Roblox created the game of the same name back in 2004, and despite its outdated graphics, it still attracts millions of players. Roblox's numbers so far can be dreamed of by Meta Platforms or Epic Games. The platform receives an average of more than 40 million players a day. In comparison, Horizon Worlds (Meta Platforms) attracts numbers hovering around 300,000 players per day on average;
- Roblox's IPO in 2021 valued the company at nearly $45 billion, with the stock losing more than 60% since the beginning of the year primarily through the losing advertising sector
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Walmart stock (WMT.US) intervened W1. The stock had been moving in a stable sideways trend for many years, from which it began climbing in 2012. Looking more broadly, along the way there were dynamic sell-offs similar to those observed in 2022 during which the stock lost between 25 and 40% (2002, 2007, 2014, 2017, 2021, 2019). The largest sell-off took place over 2014 - 2015, when the stock slid from $88 to nearly $57 per share, which coincided with the so-called 'death cross', i.e. the intersection of the 200-session average from the top by the 50-day average. As a rule, this type of intersection often heralds weakened sentiment and takes place near a price bottom. Currently, looking at the averages, we can assume that if the price trend continues, there will be an intersection of the averages, which would indicate further room for decline, however, sentiment around WalMart's stock could still improve. To date, the company, which is one of the largest retailers in the US, is about 20% from record valuations. Probably most important for further price movement, however, will turn out to be the company's Q3 financial results, which it will present on November 15. It is still unclear whether high inflation in the US will seriously affect a significant decline in the chain's sales and profits. Source: xStation5
