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Hindenburg Research Alleges Roblox Inflated Metrics and Facilitated Child Exploitation; Shares Fell 9.2%

Oct 8, 2024, 02:27 PM

Hindenburg Research has issued a critical report on Roblox Corporation, alleging that the company has inflated key user metrics and facilitated a dangerous environment for children. The report claims that Roblox has overstated its daily active users and engagement hours by 25-42%, misleading investors, regulators, and advertisers. Additionally, Hindenburg describes the platform as a 'pedophile hellscape,' citing inadequate content moderation that allows for the presence of adult content and potential child exploitation. Following the report, Roblox shares fell by approximately 9.2% in premarket trading. Hindenburg has taken a short position in Roblox. Roblox has responded to the allegations, stating that it 'totally rejects' the claims made by Hindenburg, calling the financial accusations 'simply misleading' in a statement to CNBC.