Hindenburg Research

In its latest allegations, Hindenburg Research has accused gaming company Roblox of deceiving its investors by faking the number of users on its platforms. It has also taken a short position following these allegations.

The short-selling company has alleged that this deceitful tactic led to Roblox’s shares falling 9% in the pre-market trade on Tuesday.

In its latest report, Hindenburg explains that the US-based gaming company projected a surge in user metrics by as much as 25% to 42%. Another discrepancy was found with its engagement numbers, where the number of hours a user spent was inflated by more than 100%.

Hindenburg’s findings state that the company devised its own criteria to register the daily active users (DAU) on its platform, which disregarded the possibility of the DAUs being bots or alternate accounts.

Thus, its user projections failed to be a precise indicator of its total users, Hindenburg alleged.

By peddling such lies, the company scammed its investors, authorities and marketers.

Alongside projecting fake numbers, allegations are levelled against Roblox for exposing its user base to unchecked interaction, keeping the potential threat unaddressed of minors being subjected to grooming, pornographic content, violent content, and abusive language.

Notably, Roblox is a popular online platform where users create and share games with millions of others worldwide, and can be accessed either through consoles, smartphones, tablets, or PCs.