Cathie Wood, billionaire and CEO of Ark Investment Management (NASDAQ: ARKK) has just made a $36 million bet on Roblox—a kid’s online game platform. The company had bought 519,086 shares of Roblox despite concerns about tech stock valuations.
In a holdings update published Wednesday, Ark Next Generation Internet (NASDAQ: ARKW) disclosed that it had bought shares of Roblox. The stake represents 0.51% of the ETF’s holdings and reached a $36 million market value on Wednesday’s close.
Wood, famous for her Bitcoin investments is one of the first to make a heavy bet on Roblox. The online game platform completed its IPO on the New York Stock Exchange on March 10. Shares surged to $73 from $64.50 on Thursday and the company’s market cap had already hit $45 billion.
Meanwhile, ARK soared 3.8%. Ark’s investment pushed other firms to make a bet on Roblox stock. For instance, Planatir, DraftKings, and Workhorse have all invested in the company following news about Ark’s purchase.
Game developers profited $328 million from Roblox in 2020
Roblox owes its success to its indie games developers, while also giving them the chance to earn money. For instance, Ethan Gawronski and his girlfriend Elle Deppe developed “Bad Business” an action game, with in-game purchases. The game turned $49,000 into the couple’s pockets last month alone.
In an interview with CNBC, Deppe said: “In private developer communities, there were people that were making stupid amounts of money and we thought we could do that.”
The online game company rewards its developers by sharing 30% of the total revenue from in-game virtual purchases. In a statement, Roblox disclosed that it had paid game developers over $328.7million in 2020—a 200% increase from 2019.
“What used to be a hobby has become a job for an individual person, and now is more and more becoming the foundation for large, incredibly creative studios who are emerging on our platform,” said CEO David Baszucki, who founded Roblox in 2004.