Hindenburg Research, a short-selling firm, has accused Roblox of overstating its user numbers and failing to protect young users from harmful content. In its report, Hindenburg claims Roblox inflates its daily active user (DAU) metric by 25% to 42%, allegedly counting bots and alt accounts as unique users. This, Hindenburg argues, misleads investors, regulators, and advertisers about the platform’s true user engagement.
Additionally, the report alleges that Roblox exposes children to unsafe content, including grooming, explicit material, and abusive language, suggesting inadequate child protection measures. Roblox’s shares fell after the report’s release, though the company dismissed the accusations as misleading, emphasizing Hindenburg's financial motive as a short-seller
Discussion (1)
Inflating DAUs by 25% to 42% is huge. That’s not just a rounding error; that’s misleading a lot of people and inflating their stock value. Can’t say I’m surprised, though, since the platform's gotten so big and no one would be incentivized to correct them internally..