The digital version of human life was accelerated powerfully by the pandemic. It forced us to find new ways to connect, conduct commerce, and coordinate. Without that process, it’s likely that the Metaverse might have become a tangible reality years from now, rather than imminently. But here we are.
The Metaverse theme is inevitable at this point as a major investment premise, and it may define the year ahead more than any other powerful growth theme as the elements of the theme come together.
Bloomberg recently calculated that the Metaverse could be worth nearly $800 billion for investors in the years ahead, marking it as a leading thematic axis around which high-growth portfolios will be built over the coming decade.
But the Metaverse idea is still a frontier theme in its very early innings. That means investors have the chance now to get in on the ground floor as the pieces of this puzzle coalesce. For those in early, the upside could be staggering.
With that in mind, we take a look below at a handful of the most interesting stocks in this space.
Unity Software Inc. (NYSE:U) provides software solutions to create, run and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The firm operates as a platform for creating and operating real-time 3D (RT3D) content.
It creates solutions for games, automotive, transportation & manufacturing, film, animation & cinematics, architecture, engineering & construction, brands and creative agencies, gambling and EdTech sectors. It’s a clear metaverse player and has already generated significant excitement related to this theme.
Unity Software Inc. (NYSE:U) recently announced the availability of Meta Audience Network for in-app bidding access in Unity Mediation, available within Unity Ads. With this integration, publishers get self-serve and streamlined access to a premium demand source, making it quicker and easier to maximize their revenue. Meta Audience Network is the latest addition to Unity Mediation, solutions that give developers access to the most comprehensive demand, with over 60+ ad ecosystem partners as well as enhanced tools to set pricing strategies, bid competitively, and maximize overall ad fill.
“This partnership with Meta Audience Network will unlock important access to one of the leading bidders in the industry for developers of all sizes using Unity Ads,” said Felix Thé, SVP of Product Management, Operate Solutions, Unity. “Our priority is always to enable our developers’ success and with this partnership we are delivering a streamlined path to maximizing revenue potential. This is a significant step we are taking to ensure we are equipping publishers with what they need to achieve operational and monetary efficiencies.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 22% in that timeframe.
Unity Software Inc. (NYSE:U) managed to rope in revenues totaling $315.9M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 43.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($1.7B against $625.5M).
SFLMAVEN (OTC US:SFLM) is a more speculative player, but could be more of a ground-floor kind of opportunity within the Metaverse theme. SFLM is a jewelry and luxury goods retailer and a dominant presence on eBay, driving nearly $150 million in revenues since inception. But the company is also now clearly prepping to establish itself as the leading force in luxury goods accessories in the Metaverse, and it has experience in place on the NFT side that suggest it should be taken seriously.
The company has clearly laid a foundation over the past 20 years as a bona fide global leader in auction-based sales of luxury goods. It saw nearly 50 million impressions on its eBay store page in January alone and has over 100k individual positive reviews. Now SFLM is moving into the Metaverse.
SFLMAVEN (OTC US:SFLM) just announced this morning that its CEO, Joseph Ladin, appeared on the popular MoneyTV podcast this week to discuss the company’s Metaverse strategy. The full interview can be found here.
In the interview, Ladin discussed the Company’s formation of a new division focused on the Metaverse. Ladin noted that the Company plans to engage in the design and sale of digital antique jewelry, collectibles, and art for the Metaverse, as well as the establishment of a gallery and store within the Metaverse.
The Company will fund this process through cash flows from current operations related to its core jewelry business, which has pulled in over $140 million in sales over the past two decades.
SFLMAVEN (OTC US:SFLM) is also actively shopping for Metaverse real estate and plans to establish a position very soon. The Company is currently leaning toward establishing this position in Decentraland. As discussed in the interview, the demand for “skins” and virtual accessories has proven to be a durable and rapidly growing opportunity, as evidenced by Fortnite’s $5.7 billion in sales of virtual accessories in 2020. The Company believes the market for classic luxury goods in digital form in the Metaverse holds enormous promise as well. Ladin also noted that the Company’s NFT strategy dovetails perfectly with its Metaverse ambitions.
Roblox Corp. (NYSE:RBLX) engages in the provision of online gaming services. Its platform consists of the Roblox Client, the Roblox Studio, and the Roblox Cloud. The Roblox Client is an application that allows users to explore 3D digital worlds.
The Roblox Studio is the toolset that allows developers and creators to build, publish, and operate 3D experiences and other content accessed with the Roblox Client. The Roblox Cloud includes the services and infrastructure that power the human co-experience platforms.
Roblox Corp. (NYSE:RBLX) recently announced that the company kicked off 2022 with the first DJ set performed by an avatar of international star David Guetta. Created in partnership with Roblox developer Wonder Works Studio and Warner Music Group (WMG), the DJ set premiered on February 4 and continued throughout the weekend in an interactive universe powered by the latest Roblox technology and visual enhancements.
“Working on this concert has allowed me to bring an amazing new creation to life with design and production to suit the virtual world,” commented Guetta. “We’ve built something that will play host to one of the most unique shows I’ve ever done, and I can’t wait for everyone to experience it with me.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 15% in that timeframe.
Roblox Corp. (NYSE:RBLX) pulled in $509.3M in overall sales last quarter, driving top line growth of better than 102% year over year. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($1.9B against $1.9B).
Other key stocks in the Metaverse theme include Matterport Inc. (Nasdaq:MTTR), Meta Materials Inc. (Nasdaq:MMAT), Qualcomm Inc. (Nasdaq:QCOM), Shopify Inc. (NYSE:SHOP), and the Roundhill Ball Metaverse ETF (NYSEARCA:META).
