The post Why is Roblox (RBLX) stock price crashing? appeared on BitcoinEthereumNews.com.

On October 8, noted activist short-selling group Hindenburg Research released a report alleging that Roblox (NYSE: RBLX) has been reporting inflated metrics. Hindenburg Research is notorious and feared on Wall Street for its takedown reports — in the case of The Nikola Corporation (NASDAQ: NKLA), the report eventually led to the ousting, arrest, and conviction of former CEO Trevor Milton for fraud. At press time, the stock is trading at $40.11 — down 7.30% over the past five days. RBLX stock price 1-week chart. Source: Google Finance Hindenburg Research accuses Roblox of inflating metrics Hindenburg’s latest report on Roblox centers on accusations that the company has inflated its user metrics by as much as 25% to 42% to attract and retain advertisers.  While Roblox claims to have over 65 million daily active users (DAUs), Hindenburg suggests that these figures may be overstated. Per the report, user growth appears to be stalling, and the use of bots and other automated systems allowing a single person to run more than 20 accounts simultaneously in the game appears to be a widespread issue.  This is supported by Roblox’s own disclosures, which state that DAUs ‘are not a measure of unique individuals accessing Roblox’. While the company has told the SEC that it is unable to verify whether or not a single user has multiple accounts, per Hindenburg, former employees have revealed that this is in fact something that is tracked by the company. Comments made by Roblox to the SEC. Source: BamSEC Furthermore, insiders have alleged that while this ‘de-alted’ list, a more accurate representation of daily active users, is used internally, the other, inflated list, is used in the company’s official dealings with regulators, shareholders, and advertisers. This is not the only metric that appears to be inflated — Roblox claims that…

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Filed under: News - @ October 8, 2024 4:29 pm