Hindenburg Shorts Roblox, Claiming It Inflates User Numbers and Puts Children at Risk
Hindenburg reported that Roblox has been exaggerating its user base, losing money, and putting growth ahead of child safety.

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.
Short-selling firm Hindenburg Research’s latest target is a blocky one.
On Tuesday, it published a report claiming that Roblox Corporation, the $26 billion maker of the eponymous free online video game platform, has been exaggerating its user base, losing money, and putting growth ahead of child safety. The San Mateo, California-based developer rejected the claims as baseless. “We firmly believe that Roblox is a safe and secure platform and in the financial metrics we report,” a Roblox spokesperson said in a statement. Hindenburg did not respond to requests for comment.
Roblox’s stock was down just over 2% by market close Tuesday. Year-to-date, it’s down 11.4%.
Playtime is Over
For those unfamiliar with Roblox, imagine kids making up random games in the schoolyard. Now put all that chaotic imagination into an online video game, add a dose of monetization, and you’ve got the idea.
Because of its Lego-like aesthetic, you would think Roblox is for children, and it mostly is. However, 41% of its users are 17 or older, according to its 2023 annual filing, and the game can venture into disturbing territory that Hindenburg described in detail. In many instances, child predators have used Roblox as a means to communicate with, kidnap, and assault children, according to news stories Hindenburg cited. While playing Roblox, Hindenburg investigators said they witnessed real-life pornography, visited an area that resembled an adults-only nightclub, and played a game — which had no age restrictions — where users buy guns and go on a shooting rampage in a hospital.
Additionally, Hindenburg said:
- Roblox is lying to investors, regulators, and advertisers about the number of actual users on its platform, inflating the metric by 25-42%+. It also inflated engagement hours by an estimated 100%+.
- The company isn’t profitable, and insiders have cashed out $1.7 billion in stock since Roblox went public in 2021. In the last 12 months, insiders have sold roughly $150 million in stock (that includes about $115 million in stock sold by CEO David Baszucki).
A Roblox spokesperson said Hindenburg deliberately omitted some of the company’s better financials, like bookings growing more than 22% over the past four quarters to $955.2 million in Q2 2024. “The author made no attempt to highlight any of that because the positive facts simply don’t support their agenda,” Roblox said.
The Short Game: Hindenburg’s MO is simple: Short a stock and release a lengthy, critical report of the company, strengthening the probability Hindenburg’s bet will pay off. And lately, it’s been on the warpath, going after the likes of iLearningEngines, Super Micro Computer, Axos Financial, Equinix, Temenos, Renovaro BioSciences, and LifeStance. And that’s just this year.