Roblox is accused of lying to investors about the number of users on the platform. In a report published Tuesday, investment firm Hindenburg Research claims that Roblox “consistently overstates the number of people on its platform by 25 to 42 percent or more.”
Roblox, which went public in 2021, reported 79.5 million daily active users in its most recent earnings report. However, Hindenburg claims that Roblox is “intentionally” confusing actual people with daily users, as that number could also include legacy accounts and bots. The investigation claims that Roblox can separate alt accounts from individual users, although the company's disclosure says daily active users are “not a measure of the individual people accessing Roblox.”
The company also claims Roblox isn't doing enough to protect children on the platform, claiming that its “in-game research uncovered an adult pedophile hellscape where children are exposed to grooming, pornography, violent content, and extreme “Subject to offensive language.” Roblox shares fell after the report was released.
Last week, Roblox was also accused of enabling child abuse in a financial newsletter. At the time, Roblox spokesman Eric Porterfield dismissed claims that child endangerment was a widespread problem on the platform, saying that the platform regularly updates its security practices to “detect and prevent malicious activity.”
The edge reached out to Roblox for comment on Hindenburg's report but did not immediately receive a response.