Hindenburg Research has taken a short position in Roblox Corporation, alleging that the company has engaged in misleading practices and insider sell-offs. The short seller claims that insiders have cashed out $1.7 billion in stock since the company’s 2021 direct listing, with $150 million sold in the last 12 months, including $115 million by CEO David Baszucki.
Hindenburg further accuses Roblox of inflating its user metrics, alleging that the company has overstated its active users by 25-42%, with some figures potentially inflated by over 100%. The report also claims that Roblox has been exposing children to grooming, pornography, violent content, and abusive speech, accusing the platform of failing to properly safeguard young users.
The allegations have sparked concern among investors, regulators, and advertisers regarding the company’s internal practices and the safety of its platform.