Just in time for spooky season, Hindenburg Research is back to cause some more stock market fear, and this time, it's Roblox that’s getting the short-selling treatment. 

If you’ve been wondering why your kid’s favorite virtual playground suddenly dropped 9.2%, it’s because the notorious short seller hedge fund, Hindenburg, has decided to call Roblox out for allegedly inflating its numbers—specifically, daily active users (DAUs). But it’s not just a few percentage points they’re talking about; Hindenburg is accusing Roblox of padding its stats by up to 42% and making those gaming hours look extra plump by another 100%.

So, what’s Hindenburg accusing Roblox of? Essentially, they claim that Roblox isn’t counting unique visitors as DAUs, but instead, they’re blending the total number of visits to the platform. Think of it like this: Imagine counting every time you opened your fridge as a “unique meal”—not exactly accurate, right? Add to that the claim that bots and alternate accounts from users “farming” for virtual goods on the platform are inflating those numbers. Hindenburg says that when you scrape off the frosty top layer of numbers, Roblox’s real DAUs are far less impressive than advertised.

Now, let’s be fair. Roblox isn’t just sitting back and letting this nightmare unfold. They’ve totally rejected the claims, stating that Hindenburg’s accusations are “misleading” and that they stand behind their reported financial metrics. According to Roblox, everything is on the up-and-up, and Hindenburg is doing what Hindenburg does best—short-selling and stirring the pot.

But Roblox isn’t the first company to find itself on Hindenburg’s Halloween hit list. If you’ve been keeping score, Carl Icahn and India’s richest man, Gautam Adani, have both had their turn in the short-seller hot seat.

Before you run to cash out those Robux, let’s talk numbers. Roblox’s second quarter DAUs clocked in at 79.5 million—a hefty number, no doubt. The company’s also been surging higher after raising its annual bookings forecast in August, thanks to some solid spending on all those in-game goodies (who knew virtual hats could be such a cash cow?). But if Hindenburg’s claims are true, that 79.5 million could be more like 45.8 million when you trim the fat.

Roblox makes the bulk of its money through in-game spending via its virtual currency, Robux. So, keeping user engagement numbers high is key to keeping investors and advertisers happy. If it turns out those hours are getting puffed up, the real horror story might be just beginning.

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Stock.News does not have positions in companies mentioned.