With the increase in the number of users of Roblox (RBLX.US) video game platform, optimistic investors have bought the stock one after another. Roblox shares closed Wednesday at $41.95, almost double their low of $21.65 in May, or about 94% higher.

Although Roblox has fallen 55% so far this year, investors, including wood sister Casey wood, continue to buy the stock. Wood's ARK Investment Management has been steadily increasing its holdings in the stock, buying about 147000 shares this month. Notably, Roblox's stunning rally forced its bears to close their positions, buying 876000 shares worth $42 million in the past 30 days.

Although many technology stocks have risen sharply during the market rally over the past month or so, Roblox stands out because of its reputation as the "first stock in the meta-universe". The stock fell sharply this year as investors abandoned risky assets, but now it has outperformed all the components in the Nasdaq 100 index, which bottomed in June.

The volatility in Roblox's share price is likely to continue for some time: its bears are still betting that the company will struggle to make a profit in a short period of time, while investors, including ARK Investment Management, see the company as an important player in the meta-universe and digital world that allows users to socialize, play games and do business.

Roblox reported last week that its Q2 bookings fell 4 per cent year-on-year to $639.9 million, below analysts' consensus expectations of $657.2 million. However, while the outlook for bookings has been questioned by some major Wall Street banks, at least 14 major banks, including Morgan Stanley, Citigroup and JPMorgan Chase, have raised their targets for the stock.

Tejas Dessai, an analyst at Global X, an overseas index fund, said: "the market believes that Roblox's lower-than-expected second-quarter results are just a small problem in the near future." He added that the company "still had a lot of bright spots" in the second quarter.

"if Roblox shares regain their vitality and break through their March highs, we may see a sustained rally and squeeze more short positions," said Ihor Dusaniwsky, managing director of S3 Partners Forecast Analytics, a data company.

However, Roblox also faces risks. The company may not be able to enjoy the kind of growth it enjoyed during the resurgence of the epidemic, the realization of meta-universe may not be satisfactory, and investor interest in meta-universe may diminish. In the short term, the US economy is likely to go into recession, which will lead to a general decline in consumer spending, which is also not a good thing for Roblox.