Roblox Shares Fall 10% After Hindenburg Research Short Position

Oct 8, 2024, 01:49 PM

Roblox shares fell significantly, dropping 9% premarket and 10% during trading, after Hindenburg Research announced a short position in the company, accusing it of inflating key user metrics and failing to address safety concerns on its platform. The report alleges that Roblox has been misleading investors, regulators, and advertisers by overstating daily active users and engagement hours by 25-42%. Additionally, Hindenburg's report describes the platform as a 'pedophile hellscape' due to inadequate content moderation, which allows inappropriate content and potential grooming of young users. In response, Roblox has strongly denied the claims, stating to CNBC that the financial allegations made by Hindenburg are misleading.