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Short sellers accuse Roblox of inflating user stats and enabling child exploitation

A research company accused Roblox of inflating its active user counts and enabling predatory behavior. Though Hindenburg Research has a notorious reputation, the report raises questions about the platform’s safety and viability.

However, as noted by Simon Carless, a gaming industry veteran and author of the GameDiscoverCo newsletter, Hindenburg also tends to short-sell the companies’ downfalls, literally betting that its research will lead to their failures. Reuters notes that Hindenburg has previously sunk the share prices of Super Micro Computer and stocks owned by investor Carl Icahn, India’s Gautam Adani. “For the second quarter of 2024, in a push toward profitability, Roblox reported a 2% year-over-year decline in its trust and safety expenses,” Hindenburg wrote, highlighting the company’s shift to AI moderation.

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