ROBLOX – Twersky Law Group, a highly regarded and reputable law firm based in New York, wishes to inform investors about a significant development in the form of a class action lawsuit against Roblox Corporation (“Roblox” or “the Company”) (NASDAQ: RBLX) and certain officers of the company. This lawsuit has been filed on behalf of all individuals and entities that purchased or otherwise acquired Roblox securities from March 10, 2021 through February 15, 2022 (the “Class Period”). Investors who acquired Roblox securities during this defined timeframe are strongly encouraged to participate in this case by contacting firstname.lastname@example.org. The deadline to file a motion for appointment of lead plaintiff is January 26, 2024.
The fundamental objective of this class action lawsuit is to recover for the benefit of investors who purchased Roblox securities during the Class Period, the losses they sustained as a consequence of the misleading statements made by Defendants in violation of the federal securities laws.
ALLEGATIONS AGAINST ROBLOX
The Complaint alleges that throughout the Class Period, Roblox reported strong bookings and revenue growth. The Company attributed this growth to various factors, including the positive effect from COVID stay-at-home orders, its technology investments, and “high-quality” gaming content. However, Defendants misled investors by failing to disclose that a material portion of Roblox’s growth was due to weak content controls and the lack of spending restrictions on its platform. These inadequate controls enabled younger Roblox users to play games with inappropriate content and make unauthorized Robux purchases which translated into unsustainable levels of bookings and revenue. In late September 2021, Roblox began to roll out enhanced user controls on its platform. Among other things, these new controls allowed parents to put monthly spending limits on their children’s Robux purchases. Unbeknownst to investors, the implementation of these enhanced controls would inevitably cause Roblox’s bookings growth to decelerate in the fourth quarter of 2021 and throughout 2022. On February 15, 2022, the truth about the Company’s unsustainable growth was revealed to investors when Roblox reported surprisingly weak fourth quarter 2021 results. Most of Roblox’s key metrics missed analysts’ expectations, including quarterly bookings and revenue, leading to a significant decline in the Company’s stock price and significant losses for investors. The Complaint further alleges that statements made by Defendants throughout the Class Period were materially false and misleading when made because they misrepresented or failed to disclose that: (1) the Roblox platform had insufficient content controls and lacked user spending restrictions; (2) these inadequate controls enabled younger Roblox users to play games with inappropriate content and make excessive, unauthorized Robux purchases; (3) a material portion of Roblox’s bookings and revenue growth was due to these excessive, unauthorized Robux purchases; (4) fourth quarter 2021 and 2022 bookings would be negatively impacted by Roblox’s planned rollout of enhanced parental controls; and (5) based on the foregoing, the Company’s bookings and revenue growth was unsustainable throughout the Class Period.
- Roblox Corporation is a well-known American video game development and publishing company. Roblox, the platform created by the company, is an online game creation and user-generated content platform that allows users to design their own games and play games created by other users. The platform was officially released in 2006, and it has gained immense popularity, particularly among younger audiences.
- Roblox Corporation was founded by David Baszucki and Erik Cassel in 2004. The company’s headquarters is located in San Mateo, California.
- Roblox is a game creation platform that enables users to design their own games using the proprietary game development tool called Roblox Studio. The platform provides a vast array of tools and features that allow developers to create a wide variety of games, from simple obstacle courses to complex virtual worlds.
- One of the key aspects of Roblox is its focus on user-generated content. Players can not only create their own games but also customize their avatars and create in-game items. Developers can monetize their creations through the sale of virtual items using the platform’s virtual currency, Robux.
- Roblox Corporation generates revenue primarily through the sale of its virtual currency, Robux, which players can purchase with real money. Players can then use Robux to buy virtual items, accessories, and other premium content within the games.
JOIN THIS CASE
It is important to note that a class action lawsuit has already been filed in connection with these allegations. Therefore, for those individuals who suffered financial losses in their investments in Roblox during the Class Period, there is a limited opportunity to seek appointment as a lead plaintiff. This process entails requesting the Court to designate them as the primary representative on behalf of the entire class. The deadline for submitting such a request is January 26, 2023. It is important to emphasize that while becoming a lead plaintiff can offer certain advantages, participation in the recovery process and the potential for financial compensation does not mandate serving as a lead plaintiff.
Twersky Law Group, a distinguished legal firm renowned for its attorneys expertise in handling securities fraud class actions and shareholder derivative suits, who have a long-standing track record of successfully recovering significant sums of money for investors nationwide. With an unwavering commitment to seeking justice for their clients, the firm’s attorneys are resolute in pursuing fair compensation on behalf of those affected by alleged securities law violations. As with any legal matter, it is essential to understand that this announcement constitutes attorney advertising. Past case outcomes and results achieved do not guarantee similar outcomes in this particular case.
Investors who believe they may qualify as potential class members in the class action lawsuit against Roblox are strongly encouraged to reach out directly to the firm for further information and assistance. The knowledgeable legal professionals at Twersky Law Group stand ready to provide guidance and support to investors seeking to protect their rights and pursue the recovery they deserve.