Parents Warned: Roblox Is ‘a Pedophile Hellscape for Kids’
SOPA Images
SOPA Images

One of Wall Street’s most aggressive short sellers has launched a shocking attack on gaming company Roblox, alleging management at the company have inflated performance numbers while cashing out tens of millions of dollars for themselves as their platform devolved into a “pedophile hellscape for kids.”

“We totally reject the claims made in the report,” said Roblox, in a statement to the Daily Beast. “We firmly believe that Roblox is a safe and secure platform and in the financial metrics we report.”

In its report released Tuesday, Hindenburg Research said executives and insiders at Roblox have sold $1.7 billion in stock since the company’s initial public offering in March 2021, $150 million of that in the last year. CEO David Baszucki, the firm said, has personally sold $115 million in the last twelve months.

Hindenburg alleged that executives at the money-losing Roblox, in order to make their company more appealing to markets and investors, inflated the number of people using its games to make it appear as though it was growing substantially more than it was.

“Our research indicates that Roblox is lying to investors, regulators, and advertisers about the number of ‘people’ on its platform, inflating the key metric by 25 to 42 percent,” reads the report. Roblox, it noted, said in 2022 that “over 54.1 million people” were coming to its platform “every day.”

Hindenburg alleged Roblox’s reported number of “people” instead aligns with the number of Daily Active Users (DAUs), which can include multiple accounts run by one person or bots, the latter of which it claimed “are rampant on the platform.”

Mystery Shrouds Roblox’s Two-Day Outage

“We believe Roblox intentionally conflates ‘people’ with DAUs, consistently inflating the reported number of people on its platform,” said Hindenburg. The short selling firm also accused Roblox of telling a “flat out lie” to the U.S. Securities and Exchange Commission: In 2023, the company told the regulator it is “unable to identify if a user has multiple accounts,” but Hindenburg claimed multiple former employees said Roblox internally tracks single users with multiple accounts.