Replace, 4 p.m. PT, October 8: Roblox has posted a prolonged assertion to its Investor Relations web site refuting the Hindenburg Analysis report, calling the monetary claims “deceptive” and asserting “security and civility” have been “foundational” to Roblox since its inception.
“Each day, tens of thousands and thousands of customers of all ages have secure and optimistic experiences on Roblox, abiding by the corporate’s Group Requirements,” the corporate stated. “Roblox takes any content material or conduct on the platform that doesn’t abide by its requirements extraordinarily critically, and Roblox has a sturdy set of proactive and preventative security measures designed to catch and stop malicious or dangerous exercise on the platform.”
It factors to a current weblog put up for extra data.
Regarding the financials, Roblox stated the authors of the Hindenburg report are “are quick sellers and have an agenda no matter the substance of Roblox’s enterprise mannequin and outcomes.” It added that “Roblox’s topline is rising shortly,” pointing to a bevy of numbers to maintain that.
“An examination of Roblox’s GAAP stability sheet and GAAP money move assertion makes that clear,” it continued. “The deal with money bookings and money move are themes that the corporate has centered on constantly with buyers courting again to when it was a personal firm. The authors made no try to spotlight any of that as a result of the optimistic info merely don’t assist their agenda.”
Lastly, Roblox stated Hindenburg “uncared for to precisely report on the corporate’s public disclosures,” and stated it might disclose extra monetary data and reply questions throughout its upcoming third quarter earnings name on October 31.
Earlier story as follows:
Roblox Company shares dipped on Tuesday after a brand new report from funding agency Hindenburg Analysis, which accused it of deliberating inflating its each day lively person stats and fostering what it described as an “X-rated pedophile hellscape” for kids.
As reported by the Wall Avenue Journal, Hindenburg Analysis is a well known short-selling agency identified for investigating high-profile shares and making bets in opposition to them, which typically results in investigations by the U.S. Justice Division. Its earlier targets have included inexperienced transportation firm Nikola, India’s Adani Group, and Tremendous Micro Pc.
In its report, Hindenburg Analysis says Roblox’s declare of 79.5 million each day lively customers is inflated by between 25 p.c and 42 p.c, citing a technical guide that it says monitored 7,200 Roblox video games throughout 2.1 million server, gathering 297.7 million rows of real-time participant knowledge. It additionally notes that in 2023, Roblox instructed the SEC that it’s “unable to establish if a person has a number of accounts,” and claims that a considerable amount of engagement stems from bot rings working out of nations resembling Vietnam.
“A former knowledge scientist instructed us that exercise in Vietnam ‘inflated loads of our numbers. Like loopy, insane, by way of engagement, DAU[s],” the experiences says.
Elsewhere, the report accuses Roblox of being a haven for groomers and pedophiles on account of its lack of “up-front screening to forestall them from becoming a member of the platform.” In certainly one of its most critical accusations, the report claims to have discovered a gaggle referred to as “Grownup Studios,” which has since been blocked, with 3,334 members overtly buying and selling little one pornography and soliciting sexual acts.
Roblox’s response is an abject failure to handle the 2 core allegations in our report, together with:
1. Proof that Roblox has been systematically mendacity for years in regards to the variety of folks on its platform and their real stage of engagement.
2. That the platform is a… pic.twitter.com/Tj2KiANOnI
— Hindenburg Analysis (@HindenburgRes) October 8, 2024
A Roblox spokesperson referred to as the report “deceptive” in a press release to the Wall Avenue Journal and accused Hindenburg Analysis of getting an agenda. “We firmly imagine that Roblox is a secure and safe platform and within the monetary metrics we report.”
Hindenburg Analysis responded by arguing that the corporate’s response failed to handle the report’s core allegations. IGN has reached out to the Roblox Company for any additional remark.
Lots of the accusations throughout the report have been circulating for a while now. A 2023 class motion lawsuit in California accused the Roblox Company of being deceptive about “the efficacy of its filtering applied sciences and its capacity to make the positioning secure and applicable for kids.” A 2021 report by YouTube channel Individuals Make Video games alleged that Roblox was exploiting little one labor.
“Total, we expect Roblox has adopted the Silicon Valley method of ‘progress in any respect prices’, whether or not by deceptive or outright mendacity to buyers about its key metrics or by opening its platform to harmful
predators and illicit content material unsuitable for kids,” the report says, with the Hindenburg Group saying that it has taken a brief place in shares for the Roblox company.
Kat Bailey is IGN’s Information Director in addition to co-host of Nintendo Voice Chat. Have a tip? Ship her a DM at @the_katbot.