Citi Says Roblox Engagement Steady Despite Legal, Content Creator Controversy

Citi reportedly said Roblox Corp.’s (RBLX) business sentiment remains unhurt by recent developments that stirred both legal and community concerns and caused severe pressure for the stock on Friday. 

According to TheFly, the firm pointed to two specific events behind the stock's weakness: a lawsuit filed by Louisiana’s attorney general and the controversial ban of a content creator known for catching alleged child predators on the platform. 

Roblox stock slid over 7% on Friday afternoon. On Stocktwits, retail sentiment remained in ‘extremely bearish’ territory. Message volume shifted to ‘low’ from ‘extremely low’ levels in 24 hours. 

The stock saw a 244% increase in user message count over the past 7 days. A Stocktwits user expressed optimism about the company’s growth.

Another user said the controversies will not deter people from ‘playing video games.’

While both events have sparked headlines, the firm emphasized that they pose limited fundamental risk to the company’s business at present. 

According to a report from NBC News, on Thursday, Louisiana Attorney General Liz Murrill filed a lawsuit accusing the gaming platform of allowing predators to exploit children and failing to enforce adequate safety measures. 

YouTuber Michael ‘Schlep,’ a 22-year-old content creator from Texas, was banned from Roblox and received multiple cease-and-desist notices after his investigative efforts led to the confirmed arrests of six suspected child predators active on the platform, according to an official statement from Schlep on platform X. 

However, Citi said that it is not concerned about the litigation as it is confined to one specific state and said user engagement metrics show no material impact on overall activity levels after the creator controversy. 

Roblox stock has gained over 99% in 2025 and over 185% in the last 12 months. 

Also See: Morgan Stanley Believes Apple’s iPhone Strength Might Reignite Growth – Here’s What It Said On Institutional Ownership Of Stock

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