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Hindenburg Takes Short Position, Accuses Roblox of Inflated Metrics, Child Exploitation; Shares Fall 9.2%

Oct 8, 2024, 02:27 PM

Hindenburg Research has issued a damning report on Roblox Corporation, alleging that the company has been inflating key user metrics and enabling child exploitation 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%. Additionally, Hindenburg describes the platform as a 'pedophile hellscape' due to inadequate content moderation, which allegedly allows dangerous predators and illicit content unsuitable for children. Following the release of the report, Roblox shares fell 9.2% in premarket trading. Hindenburg has taken a short position in Roblox. In response, Roblox has vehemently denied the allegations, stating to CNBC and Bloomberg that the financial claims made by Hindenburg are simply misleading.