The administration of the Roblox gaming platform misled investors about the number of people who use the platform. That’s according to a report from investment firm Hindenburg Research, which found that Roblox “consistently overstates the number of people on its platform [by] anywhere from 25% to 42% or more.”
Image source: roblox.com
Roblox went public in 2021; The company’s latest earnings report states that the platform has 79.5 million daily active users. But according to Hindenburg, the platform is “intentionally merging” a valid number of users with bots and alternative accounts. The company has the ability to separate alternate accounts from the actual number of visitors, although its own clarification states that daily active users “is not a measure of the unique individuals accessing Roblox.”
Investment company Hindenburg specializes in short selling – it identifies problems in companies, publishes the results of investigations and plays to reduce their shares. “We completely reject the allegations made in the report. The statements made by Hindenburg Research are simply misleading. The authors are admittedly engaged in short selling and have a goal independent of the nature of Roblox’s business model and results,” Desiree Fish, director of communications for Roblox, told The Verge. The company achieved its goals – Roblox shares lost value.
Hindenburg also noted that there is an acute problem of harassment of minors on the gaming platform. Last week, Roblox spokesman Eric Porterfield said the scale of the problem was exaggerated and the company frequently updates its security policies to “detect and prevent malicious activity.”