When investors know better, but behave as if they don’t

Given that most high yield investors are too old to use Roblox’s core product, it’s fair to say the company and its bankers at Morgan Stanley had a good amount of explaining to do when pitching its inaugural bond deal this week.

They seem to have risen to the challenge. The children’s video game platform—which makes most of its revenue by selling a virtual currency kids can spend in virtual worlds—raised $1bn of real, actual cash through new senior notes due 2030.

The bonds priced at 3.875%, the mid-point of talk, and softened on the break. Still, Roblox got the capital it needed as it works to diversify its income streams. Buysiders told 9fin the company did a “pretty good job” at explaining its business model and accounting quirks. Morgan Stanley declined to comment, and Roblox didn’t respond.