Roblox Accused of Massively Inflating User Stats and Fostering 'Hellscape' for Children in Scathing Report
Update, 4 p.m. PT, October 8: Roblox has posted a lengthy statement to its Investor Relations website refuting the Hindenburg Research report, calling the financial claims "misleading" and asserting "safety and civility" have been "foundational" to Roblox since its inception.
"Every day, tens of millions of users of all ages have safe and positive experiences on Roblox, abiding by the company’s Community Standards," the company said. "Roblox takes any content or behavior on the platform that doesn’t abide by its standards extremely seriously, and Roblox has a robust set of proactive and preventative safety measures designed to catch and prevent malicious or harmful activity on the platform."
It points to a recent blog post for more information.
In regards to the financials, Roblox said the authors of the Hindenburg report are "are short sellers and have an agenda irrespective of the substance of Roblox’s business model and results." It added that "Roblox's topline is growing quickly," pointing to a bevy of numbers to sustain that.
"An examination of Roblox's GAAP balance sheet and GAAP cash flow statement makes that clear," it continued. "The focus on cash bookings and cash flow are themes that the company has focused on consistently with investors dating back to when it was a private company. The authors made no attempt to highlight any of that because the positive facts simply don’t support their agenda."
Finally, Roblox said Hindenburg "neglected to accurately report on the company’s public disclosures," and said it would disclose more financial information and answer questions during its upcoming third quarter earnings call on October 31.
Previous story as follows:
Roblox Corporation stocks dipped on Tuesday after a new report from investment firm Hindenburg Research, which accused it of deliberating inflating its daily active user stats and fostering what it described as an "X-rated pedophile hellscape" for children.
As reported by the Wall Street Journal,
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