Roblox (RBLX) has come up with an innovative solution for the any parents worried about their kids playing on the gaming platform: just don’t let them. Amid accusations about children being exposed to explicit content and bullying on Roblox, its CEO, Dave Baszucki, told the BBC that parents should probably be trusted to make the decision about whether to let their children use the platform
“My first message would be, if you’re not comfortable, don’t let your kids be on Roblox,” he told BBC News in an interview. “That sounds a little counterintuitive, but I would always trust parents to make their own decisions,”
The comments came in a program called Gaming Empire: The Roblox Story, in which Baszucki talks about topics like child safety, AI and gaming.
Roblox, which remains loss-making, has been dogged by accusations that it’s not doing enough to prevent harm to younger users. Of 80 million players per day on average using its platform in 2024, about 40% of them were under the age of 13.
Child Safety Concerns Raised
In August, Roblox was banned in Turkey “due to content that could lead to the exploitation of children”, the government said. Concerns about online safety have not helped user growth, with the company missing estimates for its fourth quarter.
In a report on the stock in October, short-seller Hindenburg Research alleged that the company was inflating user metrics to impress investors. Among a litany of accusations, it said, “Roblox is compromising child safety in order to report growth to investors.” It detailed widespread failings on child safety and content moderation.
Addressing the broad concerns, Baszucki said, “We watch for bullying, we watch for harassment, we filter all of those kinds of things.” In November, following the short seller report, Roblox banned under-13s from sending direct messages and playing in more intimate “hangout experiences.”
Insiders Dump RBLX Stock
Hindenburg said Roblox was “lying to investors, regulators, and advertisers about the number of people on its platform,” inflating the key metric by up to 42%. The short seller, which closed its doors earlier this year, also said it could show engagement hours being inflated by about 100%.
The key point made by Hindenburg was that insiders were offloading their shares based on numbers that it claimed did not stack up. Since Roblox isn’t profitable, its stock price and “insiders’ ability to dump hundreds of millions of dollars of stock” therefore depends on the growth metrics it presents to Wall Street.”
Writing in October, Hindenburg founder Nate Anderson said insiders had cashed out $1.7 billion in stock since the company’s 2021 direct listing. In the 12 months prior to the October 8th report, he said insiders had offloaded $150 million in stock, including roughly $115 million by CEO Baszucki personally.
Is RBLX a Buy or Sell?
On TipRanks, our Insider Trading Activity tool shows corporate insiders have since placed Informative Sells of shares worth $6.1 million in the last three months, although the total amount offloaded in that period is much higher. As a result, it has a Very Negative Insider Confidence Signal.
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