Roblox loses $12 billion in market cap amid ongoing child predator controversy

Roblox has lost more than $10 billion in market cap since the controversy began with a child predator hunter being banned from its platform.

Roblox loses $12 billion in market cap amid ongoing child predator controversy
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Tech and Science Editor
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TL;DR: Roblox faced a $12 billion market cap loss after banning YouTuber Schlep, who exposes child predators on its platform. The ban sparked community outrage, a petition against CEO David Baszucki, and a Louisiana lawsuit accusing Roblox of failing to protect children from exploitation and unsafe content.

Roblox found itself in the boiling pot after it banned a creator who makes videos catching child predators on the Roblox platform. Now the company's market cap has dropped by $12 billion.

The Roblox stock price began to tumble after the company threatened to sue child predator hunter "Schlep," who makes videos about catching real-life child predators operating on the Roblox platform. Schlep has claimed to be involved in the arrest of six individuals participating in this activity, and Roblox recently sent him a cease and desist letter informing him that all his accounts are banned.

Schlep responded to the cease and desist letter by posting a video to, at the time, 640,000 subscribers, and now 1.62 million subscribers, explaining what had happened. Schlep added that he experienced grooming by an individual on Roblox when he was younger, and that his motivation behind his child predator-catching activities on Roblox is to prevent what happened to him from happening to other children using the platform.

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Roblox claimed in its letter that Schlep was "engaging in simulated child endangerment conversations, sharing or soliciting personally identifiable information (PII), [and] directing users to move conversations off-platform."

The response by the community over Schlep's banning was immense, with Schlep's video gaining more than 4.6 million views, and a petition was started to remove Roblox CEO David Baszucki. The petition gained more than 100,000 signatures. Roblox responded to the community outcry and said "vigilante" activities on its platform are against its terms of service, and created an unsafe environment on the platform. Read more of the response from Roblox here.

This sparked a further outrage by the community, and eventually the involvement of Louisiana Attorney General Liz Murrill, who announced the state is suing Roblox for "Facilitating the distribution of child sexual abuse material and the sexual exploitation of Louisiana's children." Failing to implement "basic safety controls to protect child users from predators." And also failing to warn parents of these dangers on its platform.

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The August 15 lawsuit from Louisiana correlates with an intense dip in Roblox's market cap, which began tumbling on August 10, a day before the Schlep video was posted. On August 10, Roblox's market cap was sitting at $90.64 billion, and by August 15, it was down to $81 billion. The stock price is continuing to drop, causing the market cap to hit $79 billion as of August 21. It has since regained to $81 billion as of August 22.