Roblox Stock Plummets 10% Amid Louisiana Child Safety Lawsuit

Roblox Corporation (NYSE: RBLX) saw its stock drop by almost 10% on Friday, August 15, closing at around $117. The decline came just one day after Louisiana Attorney General Liz Murrill filed a lawsuit against the company, accusing it of failing to protect children on its platform.

The lawsuit, filed on August 14, 2025, paints a harsh picture of Roblox, calling it a “perfect place for pedophiles.” It alleges that the platform’s weak moderation, deceptive systems, and inadequate security features allow predators to thrive and expose minors to harmful or exploitative content. According to the complaint, Roblox has prioritized user growth and profits over the safety of its young audience.

This isn’t an isolated case either. Similar lawsuits have surfaced in other states, including a recent one in Iowa where a 13-year-old was reportedly kidnapped after meeting a predator through Roblox. Beyond the U.S., the platform has also faced criticism and restrictions in other countries like Qatar and Indonesia over the same issue — child safety. All of this has rattled investors, who now fear mounting legal risks could drag down the company’s future growth.

Despite the sharp drop, this isn’t the worst single-day fall Roblox has experienced. The company’s stock history is filled with volatility since its IPO in 2021. For example, it saw a dramatic 26% plunge in February 2022 following missed growth expectations, with losses stretching to 30–35% over several trading days. More recently, February 2025 brought a ~15% decline after disappointing Q4 results.

Unlike those instances, the latest dip isn’t due to financial performance but is tied to lawsuits, as the latest Q2 report actually showed a +21% YoY revenue growth and positive metrics across the board.

Roblox did issue a response, rejecting Louisiana’s claims and stating that user safety remains a “top priority.” The company stressed that its trust and safety teams often remove harmful content "within a few minutes" and that it continues to invest heavily in protective measures. Still, with fresh lawsuits piling up and state-level action escalating, investor anxiety remains high.