Hindenburg Research is short shares of Roblox Corporation (NYSE:RBLX). Roblox is a $27 billion online gaming platform headquartered in San Mateo, CA. The company was incorporated in 2004 and is led by founder and CEO David Baszucki.
The company has reported net losses every quarter since becoming a public company, with last twelve months (LTM) losses totaling $1.07 billion. Its stock trades at 8.
6x sales, a 57% premium to gaming peers, pricing in expectations of rapid future growth and profitability. Insiders have cashed out $1.7 billion in stock since the company’s 2021 direct listing.
In the last 12 months, insiders have sold ~$150 million in stock, including ~$115 million by CEO Baszucki personally. Since Roblox isn’t profitable, its stock price (and, in turn, insiders’ ability to dump hundreds of millions of dollars of stock) is reliant on the growth metrics it presents to Wall Street. Our research indicates that Roblox is lying to investors, regulators, and advertisers about the number of “people” on its platform, inflating the key metric by 25-42%+.
We also show how engagement hours, another key metric, is inflated by an estimated 100%+. Since prior to going public, Roblox has reported the number of “people” on its platform in dozens of official investor communications. Among many examples, Roblox wrote in a 2022 quarterly report, “there are over 54.
1 million people coming to Roblox every day”. Our findings show that the company’s reported number of .
