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Hindenburg Research Takes Short Position in Roblox, Shares Fell 9.2% Amid Allegations of Inflated Metrics and Safety Issues

Oct 8, 2024, 02:23 PM

Hindenburg Research has issued a critical report on Roblox Corporation, alleging that the company has inflated its key user metrics and failed to address significant safety concerns on its platform. The report accuses Roblox of misleading investors, regulators, and advertisers by overstating its daily active users and engagement hours by 25-42% and highlights rampant bot activity. Additionally, Hindenburg claims that the platform is a 'pedophile hellscape' due to inadequate content moderation, which exposes children to potential predators and inappropriate content. Hindenburg has taken a short position in Roblox, criticizing the company's 'growth at all costs' approach. Following the release of the report, Roblox shares fell by 9.2% in premarket trading. In response, Roblox has categorically denied the allegations, stating that the financial claims made by Hindenburg are 'simply misleading' and that the company 'totally rejects' the assertions made in the report, according to CNBC and Bloomberg.