Hindenburg Research, a prominent short-selling firm, has released a scathing report accusing the Roblox Corporation, amongst other things, of creating an "X-rated paedophile hellscape" for children, and of reporting inflated Roblox metrics to investors. Roblox Corporation, which reported an operating income of $1.6 billion last year, refutes these claims, calling them "misleading".
As reported by the Wall Street Journal (thanks, IGN), Roblox stocks dipped in response to the report, which was at least partially the point. Previous reports by Hindenburg have resulted in U.S. Justice Department investigations into companies like Nikola, Adani Group, and Super Micro Computer. The research firm alleges Roblox's claim of 79.5 million daily active users is inflated by between 25% and 42%, citing an independent technical consultant it employed to monitor 7,000 games across 2.1 million servers, collecting some 297.7 million rows of real-time player data.
Far more concerning than the corporate fibs, the report alleges that the game has become a haven for paedophiles and groomers due to a lack of "up-front screening to prevent them from joining the platform." In a truly heinous discovery, Hindenburg claims to have found one group called "Adult Studios", with its 3,334 members openly trading child pornography and soliciting sexual acts on the Roblox platform.
An estimated 60% of Roblox users are children under 16, and 21% are under nine. Hindenburg found 900+ variations of accounts called "Jeffrey Epstein", seemingly unmoderated. Upon registering for a child account, Hindenburg could easily access thousands of user-created games like "Escape to Epstein Island" or "Diddy Party".
A Roblox spokesperson called the report "misleading", accusing Hindenburg of having an agenda and refuting the claims, stating: "We firmly believe that Roblox is a safe and secure platform and in the financial metrics we report." Hindenburg, for its part, said that Roblox's response failed to address the report's core allegations.