5 Stocks Hedge Funds Dumped Before the Market Crash

4. Roblox Corporation (RBLX):

Number of Hedge Funds: 40 (2022Q1)
Number of Hedge Funds: 61 (2021Q4)

Another high growth stock hedge funds dumped during the first quarter is Roblox Corporation. The number of bullish hedge fund positions declined by 21 during the first three months of 2022 as RBLX lost around half of its value. Tybourne Capital, Hitchwood Capital, and Ratan Capital were among these hedge funds. Here is how Tao Value explained why hedge funds initially flocked into Roblox:

“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in virtual world. Apple in its iOS 14.5 rolled out an impactful change for digital advertising landscape by requiring all apps to ask users to “opt in”.

Unfortunately, both Meta Platforms and Roblox experienced huge outflows during the first quarter as investor appetite towards metaverse stocks soured.