From Financial Modeling Prep: 2024-10-08 12:44:00

Roblox Corporation (NYSE:RBLX) saw a 9% stock drop after a critical report from Hindenburg Research accused the gaming company of inflating user metrics, financial mismanagement, and inadequate protection for young users.

Hindenburg’s report revealed Roblox’s $1.07 billion losses in the past year, questioning its $27 billion market valuation and 8.6x sales multiple compared to industry peers.

Allegations include Roblox overstating user base by 25-42% and exaggerating engagement hours by over 100%, raising concerns about data accuracy and transparency.

Safety issues were also highlighted, with claims of inadequate content moderation exposing young users to inappropriate material and potential risks, impacting Roblox’s reputation and regulatory standing.



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