Roblox stock down 9% as company sued for allegedly failing to 'protect children from predators'

Roblox Corp. stock drops nearly 9% as it faces a scathing lawsuit from Louisiana's attorney general.

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Roblox is being sued by the state of Louisiana for allegedly "permitting and perpetuating an online environment in which child predators thrive." The news has spread rapidly, leading to public outcry and backlash, and the game-maker's stock took a hit from the fiery controversy. Roblox's stock dropped 8.96% after the news of the lawsuit broke.

The gaming platform is among the most popular video games on the market right now with over 82 million daily active users--for comparison, Sony's entire PlayStation platform has 120 million monthly active users--and the company generated $3.6 billion in 2024 from its user base, which is primarily children. The games-as-a-service platform has been closely scrutinized for its business practices and safety policies, especially those involving children.

Critics say that Roblox isn't doing enough to protect kids, and some are taking matters into their own hands. One Roblox user named Schlep became a self-proclaimed "pedophile hunter," targeting and exposing specific individuals on the platform. Schlep's efforts reportedly led to the arrests of 6 people.

Roblox responded by banning Schlep and issuing a cease and desist to discourage "vigilantism" on the platform.

The company responded to the issue with a sizable 43-minute video where Roblox CEO David Baszucki and other execs discuss all of the safety measures that are taken to protect children on the platform.

Schlep has the top comment on the new Roblox video with 14,000 likes:

"How did I get 6 predators in your community arrested?"