Roblox sinks after revealing the number of monthly active users on its platform declined in May

• Roblox stock fell as much as 10.5% on Wednesday before mounting a mild recovery.
• The fall came after the company revealed a 1% decline in month-over-month active users on its platform in May.
• Roblox's monthly active user count was still up 28% since May of last year.
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Roblox stock sank on Wednesday after the gaming company revealed the number of monthly active users on its platform fell 1% in May, ending a run of strong user growth.

Daily active users hit 43 million in May, according to Roblox, which was up 28% from the same period last year, but down roughly 1% from the 43.3 million mark achieved in April.

Total platform hours engaged increased 9% year-over-year and 1% from April, however, to hit 3.2 billion. Revenue also more than doubled in the month, rising 123-126% to between $149 million and $151 million.

In bearish news for the gaming platform, Roblox was sued by the National Music Publishers' Association for $200 million in damages earlier this month.

The association said Roblox wasn't authorized to use music from artists including Ariana Grande, Imagine Dragons, Ed Sheeran, the Rolling Stones, and more on its platform.

Roblox was also sued by a Michigan dad named John Dennis and his daughter for providing "sham content moderation" by deleting items it sold, then refusing to refund users after the items were removed from inventories.

Despite the recent setbacks, there has been some bullish news of late for Roblox.

The company was the top-grossing mobile game on the iOs App Store and Google Play in the first quarter of 2021, according to research firm App Annie.

Roblox also received some analyst support in May with both Morgan Stanley and JP Morgan reiterating their "buy" equivalent ratings on the firm.

Morgan Stanley holds an $87 price target, while JP Morgan sees $85 per share in the cards.

Roblox stock was down 6.81% as of 12:00 p.m. ET on Wednesday.