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

Oct 8, 2024, 01:53 PM

Hindenburg Research has issued a critical report on Roblox Corporation, alleging that the company has inflated key user metrics and allowed a dangerous environment for children on its platform. The report claims that Roblox has been misleading investors, regulators, and advertisers by overstating its daily active users and engagement hours by 25-42% through rampant bot activity. Additionally, Hindenburg describes the platform as a 'pedophile hellscape,' citing concerns about inadequate content moderation. Following the report, Roblox shares fell by 9.2% in premarket trading. Hindenburg has taken a short position in Roblox shares. Roblox has responded by rejecting the claims, stating that the financial allegations made by Hindenburg are 'simply misleading.' The company conveyed this response via an emailed statement to CNBC.