Hindenburg accuses Roblox of inflated metrics, shares hit
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The news: Roblox shares fell over 9% after short-seller Hindenburg Research accused the gaming platform of inflating key metrics and prioritising growth over child safety.
The context: Hindenburg's report claims Roblox has exaggerated daily active user figures since it listed in 2021 by counting bots and multiple accounts as unique users.
A consultant hired by Hindenburg analysed 30.4 million daily users and found engagement hours significantly lower than reported, flagging “zombie” accounts that artificially boosted engagement data.
In 2023, Roblox reported 2.4 hours of average daily engagement.
Additionally, the report’s “in-game research revealed an X-rated pedophile hellscape,” the firm said, citing predatory behaviour facilitated by lax sign-up processes.
A Roblox spokeswoman rejected the claims, telling Reuters they were “simply misleading” and that the authors of the report “have an agenda.”
“We firmly believe that Roblox is a safe and secure platform and in the financial metrics we report,” the spokeswoman said.
The numbers: Roblox reported 79.5 million daily active users as of 30 June and USD955.2 million in bookings for Q2 2024.
Shares in the USD26 billion company fell 9.37% to an intraday low of USD37.51, their lowest level since mid-August.
The sources: Hindenburg Research , Reuters , Bloomberg
