"The first stock of the Metaverse" Roblox was shorted by a well-known short-selling institution, accusing it of exaggerating key data, leading to a sharp drop in stock price
Short-selling institution Hindenburg Research accuses online gaming platform Roblox of inflating key metrics and lacking measures to ensure children's safety. After the release of the short report, Roblox's stock price fell more than 9% in Tuesday's trading session, marking the largest decline in two months
After short-selling institution Hindenburg announced its short position on the online gaming platform Roblox, the company's stock price fell nearly 9.4% intraday on Tuesday, hitting a new low since early August. As of Monday's close, it has dropped nearly 9.5% this year.
In its report, Hindenburg pointed out that Roblox exaggerated key data and lacked sufficient security measures to prevent pedophiles from using the platform.
A Roblox spokesperson responded:
"We completely deny the claims in the report. Undeniably, the authors of the report are short-sellers (regardless of Roblox's business model and performance, they have their own agenda)."
Roblox's cash revenue has grown by over 22% in the past four quarters, reaching $9.552 billion, generating $576 million in free cash flow during the same period. The company spokesperson emphasized that these are the metrics Roblox consistently highlights to investors and firmly believes that Roblox is a safe platform.
"The Bear Cave" is a financial news newsletter specifically for those who like to short stocks. The operator of the website, Edwin Dorsey, published a negative report on the platform in 2022, expressing some concerns about Roblox. However, Dorsey stated that he writes these reports not because he intends to short the stocks of these companies himself