Roblox (RBLX) stock took a beating on Friday after Louisiana Attorney General Liz Murrill filed a lawsuit against the video game platform. The lawsuit alleges that the failure of the company to develop safety protocols has created a platform that is the “perfect place for pedophiles.”
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The lawsuit takes issue with the age verification system on the platform, which allows users to easily lie about their age and access areas designed for children. Murrill argues the company’s current system “prioritizes user growth, revenue, and profits over child safety,” and that it has intentionally or recklessly created a platform that puts children in danger.
Child safety is a major concern for Roblox, as roughly 20% of its users are age nine or under. With such a large audience made up of children, the company needs to be strict in how it manages content. However, it has failed to do so, with player-made content such as “Escape to Epstein Island” and “Diddy Party” being available on the platform.
Roblox Blocks Predator Hunter Schlep
The lawsuit from Attorney General Murrill comes in the same week as Roblox’s ban of YouTuber Schlep. Schlep, who has over 600,000 subscribers, specifically hunted child predators on Roblox. His reports have resulted in several arrests. He was inspired to do this after he was allegedly groomed on the platform and was unsatisfied with Roblox’s response.
RBLX stock was down 6.79% on Friday but remained up 101.81% year-to-date. The shares have also rallied 208.65% over the past 12 months.
Is Roblox Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Roblox is Strong Buy, based on 16 Buy, three Hold, and a single Sell rating over the past three months. With that comes an average RBLX stock price target of $145.20, representing a potential 23.92% upside for the shares.
