On October 9, Caifeng News (Edited by Niuzhanlin) On Tuesday local time, the well-known American short-selling institution Hindenburg Research Corporation released a report stating that , known as the first stock of the metaverse $Roblox (RBLX.US)$ exaggerated key financial indicators such as user numbers and engagement, and has therefore shorted the company's stocks. After the news was released, roblox's stock price fell more than 9% in early trading, narrowing to 2.13% by the close.

In recent years, Hindenburg has been making a series of moves, becoming one of the most well-known short-selling institutions globally. In January last year, the institution released a sensational short-selling report that quickly led to the collapse of Asia's former richest man, Adani's business empire. Subsequently, they successfully shorted the financial services company Block and Icahn Enterprises under the billionaire Carl Icahn. Recently, after Hindenburg shorted super micro computer, its stock price also suffered a severe blow.

According to Hindenburg, Roblox deliberately confuses daily active users (DAU) with the number of people accessing its platform, and Roblox has always considered robots as users, and regards multiple accounts created by the same person as independent users.

The report stated that Roblox deceived investors, regulators, and advertisers in terms of "users" on its platform, exaggerating this key indicator by 25-42% or more, and another key indicator, engagement time, is also estimated to be exaggerated by over 100%.

Hindenburg claims they hired technical advisors to design a system that monitored Roblox game servers for 10 days to verify its financial indicators, and found many game users staying active for over 24 hours without interruption.

Unlike traditional video game companies, Roblox relies on user-generated content to increase user stickiness, with a majority of its revenue coming from the virtual currency Robux consumed in the game. Data shows that Roblox made $3.5 billion last year mainly by selling its virtual currency Robux.

Due to strong in-game consumer spending, the company raised its annual booking forecast in August. As of June 30, its daily active users were 79.5 million.

Wedbush Securities analyst Michael Pachter commented: "There are many interesting aspects in this short report, but they seem to have many misunderstandings about how the game operates."

Pachter added that Wedbush measures user engagement based on "sessions," but players typically log in and out of a game multiple times a day, and play more than one game. "Wedbush seems to be measuring the time each user plays one game."

Since its IPO, Roblox has incurred a net loss every quarter, with a total loss of $1.07 billion in the past 12 months. Last year's revenue was $2.8 billion, and its current market cap is close to $26 billion.

Roblox completely denies the accusations in the Wedbush report, stating that these financial indicators are misleading and released for special purposes. A company spokesperson said: "We firmly believe that based on the financial indicators we have published, Roblox is a safe and reliable platform."

Editor/Somer