Key Takeaways
- Roblox stock fell 3% today after short seller Bleecker Street Research disclosed a bet against it, citing child safety and slowing user growth.
- Thursday’s third-quarter report can test the short seller’s claim about user growth. The safety claims will take longer to settle.
- Management guided third-quarter bookings down 14% to 18% and expects daily users to rise from 123 million, while free cash flow is guided to about breakeven.
- After a 17% one-month run, the stock already prices in a recovery, so daily users and the fourth-quarter guide have to back it up.
Roblox (RBLX) fell 3% today after Bleecker Street Research disclosed a short position and published a report going after both its child safety controls and its user growth.
The timing stings. The stock was up 17% in the past month (through Monday’s close), and Roblox reports third-quarter results after the close on Thursday, Oct. 29. So investors won’t wait long for an answer on half of Bleecker’s case.
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What Bleecker Street found
The safety half got the most attention. Bleecker said it bought 100 age-verified child accounts on third-party marketplaces for a combined $190.91. It then logged into all 100 from five countries within two hours, and was never asked to verify again. It also counted nine marketplaces selling verified accounts, four of them with more than 65,000 listings.
(No one has independently verified these findings. They also don’t show how often this happens across the platform.)
The growth half comes with numbers:
- Using third-party data on about 6.7 million accounts, Bleecker estimates new active users fell about 50% year over year in the third quarter, with no recovery through September.
- It says this summer’s hit, Steal an Egg, drew a share of new players about 20 percentage points lower than comparable 2025 games.
- It points to daily active users falling from 151.5 million to 123 million, and monthly paying users from 36.7 million to 27 million.
Daily users are the number to watch
Investors already knew about much of this. Back in July, Roblox guided third-quarter bookings to $1.58 billion to $1.65 billion, down 14% to 18% from about $1.92 billion a year earlier. Roblox’s own second-quarter count of 123 million daily users was still up 10% from a year earlier, and monthly payers rose 15% to 27 million.
Bleecker’s new-user estimate is the new part. If new players really fell by half, Thursday’s daily user count should show it. Management expects that count to rise from 123 million in the third quarter. A flat or falling number would make the short seller’s case a lot stronger.
The fourth-quarter guide may matter even more. For Roblox, analysts’ sales estimates track bookings. They call for $6.90 billion in 2026, barely above 2025’s $6.79 billion.
That estimate leaves room for fourth-quarter bookings of roughly $1.96 billion to $2.04 billion, against $2.2 billion a year ago. A guide below that range would mean another cut to estimates, and it would support Bleecker’s argument.
Cash has to hold up too
Roblox’s own record shows what a stall can do. Bookings grew 45% in 2021, then just 5% in 2022, and free cash flow turned negative that year.
It has since climbed to $1.36 billion in 2025. But management guided third-quarter free cash flow to -$60 million to $5 million, against $444 million a year earlier. Analysts expect $915 million for all of 2026, down 32%.
The rally already prices in a recovery
After the run, Roblox trades at 5.5x forward sales. That’s below its three-year average of 7.2x, but well above its 3.5x low on July 31, the day after the second-quarter report.
Thursday won’t settle the safety allegations. Ten states and Los Angeles and San Diego counties are suing, and Roblox set aside $91 million for state settlements in the first half. How management responds to Bleecker’s tests on the call could move the stock as much as any figure in the release.
My take: the safety findings will weigh on the stock long after Thursday, but the growth claim gets its answer this week. With the stock priced for a rebound, I’d want to see daily users above 123 million and a fourth-quarter guide near $2 billion before I trusted this rally. If Roblox misses on either, the short seller has the numbers on its side.
Of course, Bleecker’s user estimate comes from a sample of 6.7 million accounts. Roblox’s own count on Thursday is the one the market will trade on.
So what is Roblox stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
