The bear market has dominated 2022. Investors are maxed out at “peak bearishness” in terms of market sentiment. Blood is running through the streets. Rumors are even swirling about a major investment bank teetering on the brink and a tyrant is threatening nuclear war.
History suggests that it is precisely at such times that opportunity is both most ripe and hardest to see. This is especially true for themes that represent the future – the next around-the-corner economy set to emerge when the fog of war of this cyclical bonfire has cleared, and the new bull starts to dawn.
The metaverse and digital ownership technology could be dead center in that story yet to be written.
Earlier this year, JPMorgan put out a lengthy research piece called “Opportunities in the metaverse”, making the case, basically, that the cost of being left behind by not developing a metaverse strategy would likely become far greater than the risks involved in participating for most businesses and investors.
As noted in the piece, “We are not here to suggest the metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike. Whether it’s large tech players such as Microsoft planning to create realistic workspaces, or Ariana Grande holding a concert in Fortnite, the opportunities presented by interactive, digital worlds seem limitless. The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues.
“As a result, we see companies of all shapes and sizes entering the metaverse in different ways, including household names like Walmart, Nike, Gap, Verizon, Hulu, PWC, Adidas, Atari and others. Business leaders and boardrooms around the world are now asking themselves, ‘What is my metaverse strategy? What am I supposed to be doing in the metaverse? What is the metaverse anyway?’”
Since that report was issued, we have seen everything in the growth technology space go on bargain-basement sale as investors flee risk assets. Now, here we sit, with sentiment at multi-decade lows, nuke threats in play, investment banks getting run… It may be time to stick a toe in the water.
With that in mind, we take a look below at some of the most interesting stocks vying for a chunk of that trillion-dollar thesis in the years ahead.
Roblox Corp. (NYSE:RBLX) is often seen as one of the most compelling operationalizations of the metaverse theme and potential. The company is in the online gaming services space, with a leading platform that consists of Roblox Client, Roblox Studio, and Roblox Cloud.
Roblox Client is an application that allows users to explore 3D digital worlds. Roblox Studio is the toolset that allows developers and creators to build, publish, and operate 3D experiences and other content accessed with Roblox Client. Roblox Cloud includes the services and infrastructure that power the human co-experience platforms.
Roblox Corp. (NYSE:RBLX) recently released certain key metrics for August 2022, including news that Daily active users were 59.9 million, up 24% year over year, Hours engaged were 4.7 billion, up 18% year over year, Estimated bookings were between $233 million and $237 million, up 5% – 7% year over year, Estimated average bookings per daily active user was between $3.89 and $3.96, down 14% – 16% year over year, and Estimated revenue was between $208 million and $211 million, up 22% – 24% year over year.
Management also noted that “the strengthening of the US Dollar against the Euro, British Pound, and other foreign currencies during 2022 has had an adverse impact on bookings. We estimate that the impact of foreign currency fluctuations led to a reduction of around 4% in the bookings year over year growth rate. On a constant currency basis, we estimate bookings growth would have been 9% – 11% year over year.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. RBLX shares have been moving higher over the past week overall, pushing about 3% to the upside on above average trading volume.
Roblox Corp. (NYSE:RBLX) managed to rope in revenues totaling $591.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 30.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($3.1B against $2.3B).
Cosmos Group Holdings Inc. (OTC US:COSG), which is primarily doing business as “Coinllectibles”, is an extremely interesting speculative play. The idea here is basically about offering a new model that could be set to replace the non-fungible token (NFT).
The company is an established player in the authentication, valuation and certification (AVC) service, sale and purchase, hire purchase, financing, custody, security and exhibition (CSE) services marketplace for art and collectible buyers through traditional channels. But it has expanded that footprint into the blockchain space with the establishment of its digital ownership tokens (DOTs)
Cosmos Group Holdings Inc. (OTC US:COSG) Coinllectibles business bills itself as a technology company supporting the collectibles industry with a focus on rare memorabilia and artworks that exist and have intrinsic value in the real world, whether tangible or intangible in nature.
Coinllectibles™️ applies blockchain, marketplace, metaverse and DOT technologies as tools to disrupt and enhance the real world collectibles industry. The technology underpinning DOTs (digital ownership tokens) has multiple functional use cases that Coinllectibles™️ is applying to areas including art, sports, watches, numismatics, limited edition toys, limited edition fashion wear and sneakers. DOTs have the power to transform our societies and some areas may be subject to regulations. Coinllectibles™️ uses DOT technology solely to provide a legally-binding digital ownership token (DOT) to a tangible or intangible collectible.
Since its first digital ownership token (DOT) was minted on 6 September 2021, the company has partnered with NBA Hall of Fame recipient, Chris Webber, to disrupt the Sport & Entertainment Collectibles space, entered into an equity purchase agreement with an institutional investor for the purchase of up to US$30 million of COSG common stock, launched its MetaMall to sell curated collectibles DOTs, and partnered with OKX to launch the inaugural Coinllectibles DOTs collection.
Cosmos Group Holdings Inc. (OTC US:COSG) Terry Lee, Head of Art for Coinllectibles, said, “It is amazing to see what Coinllectibles has achieved in such a short time. Having said that, our work is not done and there is still a lot more projects in the pipeline. What is quite clear to the team is that there is a huge opportunity for us in the art and collectibles market. Based on research, those markets are expected to reach US$347billion by 2030. It is simply exciting when you think about how well-positioned Coinllectibles is and serving those markets will definitely be our focus for some time.”
Matterport Inc. (Nasdaq:MTTR) operates as a spatial data company that focuses on digitizing and indexing the built world. The implications for the transition into the Metaverse should be obvious.
The firm’s products include 3D content platform, pro2 3D camera, 360 cameras, virtual reality, and mobile apps. It serves residential real estate, engineering and construction, travel and hospitality, and commercial real estate sectors.
Matterport Inc. (Nasdaq:MTTR) recently introduced its all-new Matterport Pro3 Camera along with major updates to its industry-leading digital twin cloud platform. The Pro3 is a breakthrough in 3D capture technology, ready to digitize every aspect of the physical world, indoors and outdoors. Matterport’s next generation digital twin platform builds on the company’s groundbreaking immersive virtual experiences to enable advanced workgroup collaboration and productivity, delivering cost savings and revenue growth for organizations of all sizes, from small businesses to global enterprises.
“Today marks a pivotal breakthrough in 3D technology with the introduction of the most powerful products Matterport has ever created,” said RJ Pittman, Chairman and Chief Executive Officer, Matterport. “Our new Pro3 camera and cloud platform create some of the world’s most accurate, immersive and stunning digital twins. The opportunity has never been greater for companies to embrace the power of Matterport digital twins to transform their business.”
We’ve witnessed 2% piled on for shareholders of the stock during the trailing week, but this action is running counter to the larger trend in the name. The situation may be worth watching. MTTR has a track record that includes a number of dramatic bounces.
Matterport Inc. (Nasdaq:MTTR) has a significant war chest ($476.2M) of cash on the books, which stands against about $50.2M in total current liabilities. One should also note that debt has been growing over recent quarters. MTTR is pulling in trailing 12-month revenues of $111.7M. However, the company is seeing recent declines on the top-line on a sequential quarterly basis, with revenues falling a little as of its latest reporting period.
Other key players in the digital ownership technology space include Meta Platforms Inc. (Nasdaq:META), Takung Art Co. Ltd. (NYSE American:TKAT), Funko Inc. Cl A (Nasdaq:FNKO), Dolphin Entertainment Inc. (Nasdaq:DLPN), and eBay Inc. (Nasdaq:EBAY).
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