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Roblox
Short-selling firm Hindenburg Research published a lengthy report accusing Roblox of inflating user stats and fostering an "X-rated pedophile hellscape." Roblox was quick to refute these claims, saying it takes safety and reporting obligations seriously.
Here's the story. Hindenburg Research is known for investigating stocks and has targeted Nikola, India's Adani Group, and Super Micro Computer previously (via IGN.) Now, the firm has decided to see what Roblox has to hide.
In its report, Hindenburg Research claims Roblox is lying to investors by saying 79.5 million people play it every day, which is 25-42% off the real numbers. Moreover, most traffic comes from Vietnam and the Philippines, according to the article.
The most shocking part is Hindenburg Research calling Roblox an "X-rated pedophile hellscape, replete with users attempting to groom our avatars, groups openly trading child pornography, widely accessible sex games, violent content and extremely abusive speech." This, in its opinion, is because there is no "up-front screening to prevent them from joining the platform."
The firm also collected several cases of adults using Roblox to groom and exploit children offline, proven by links to news sites.
Roblox
Of course, such a loud case couldn't be left without a comment from Roblox itself, which is usually quick to defend its reputation (as we learned firsthand after an article quoting Roblox Studio head, who said, "You can say, 'Okay, we are exploiting, you know, child labour,' right? Or, you can say: we are offering people anywhere in the world the capability to get a job, and even like an income.")
Roblox rejected the "misleading" claims made in the report, reassuring investors that "safety and civility have been foundational to Roblox since the company’s inception."
"Roblox takes any content or behavior on the platform that doesn’t abide by its standards extremely seriously, and Roblox has a robust set of proactive and preventative safety measures designed to catch and prevent malicious or harmful activity on the platform. For more information about Roblox’s safety efforts, see this most recent blog post."
As for the financial claims, Roblox believes Hindenburg Research has "an agenda irrespective of the substance of Roblox’s business model and results." The business is growing, and the company is open and truthful in its public statements, Roblox says.
"Because DAUs (daily active users) measure account activity and an individual user may actively use our platform within a particular day on multiple accounts for which that individual registered, our DAUs are not a measure of unique individuals accessing Roblox. Additionally, if undetected, fraud and unauthorized access to our platform may contribute, from time to time, to an overstatement of DAUs. In many cases, fraudulent accounts are created by bots to inflate user activity for a particular developer’s content on our platform, thus making the developer’s experience (which refer to the titles that have been created by developers) or other content appear more popular than it really is. We strive to detect and minimize fraud and unauthorized access to our platform."
The company will discuss this topic and answer any questions during its third third-quarter earnings call on October 31, 2024.
Hindenburg Research has tons of information and videos supporting its claims, so if you want to get to the bottom of this, read the whole report here. Also, join our 80 Level Talent platform and our Telegram channel, follow us on Instagram, Twitter, LinkedIn, TikTok, and Reddit, where we share breakdowns, the latest news, awesome artworks, and more.