An American investment research firm, Hindenburg Research, released an extensive investigation into issues with the gaming platform Roblox. Among other things, it claimed that Roblox's management regularly inflates user numbers in financial reports by 25-42%.
Roblox
Hindenburg Research asserts that Roblox does not exclude bots and players using multiple accounts from its statistics. The company allegedly paints inflated numbers in reports, despite having tools to distinguish actual players from others.
The gaming time on the platform is another metric that Roblox is accused of inflating. According to Hindenburg Research's estimates, users spend about 22 minutes per day on Roblox games, while Roblox itself claims users spend 2.4 hours daily.
Hindenburg Research also labeled Roblox a "pedophile's paradise" and accused the platform's management of not doing enough to ensure child safety.
A Roblox representative refuted Hindenburg Research's claims in a media comment, stating that the firm is misleading for its own financial benefit.
For reference: Hindenburg Research is known for publishing high-profile investigations about public companies worldwide to profit from their stock price drops. For instance, its investigations led to a steep decline in the market capitalizations of Super Micro Computer, Adani Group, Nikola Corporation, and many other companies.
As noted by The Wall Street Journal, shortly after Hindenburg Research's article was published, Roblox's stock price dropped by 10%, although by the close of the market on the evening of October 8, the decline had reduced to 2%.