Roblox Corporation's stock experienced a significant intraday decline of 5.08% on Friday, reflecting heightened investor concerns.
The sharp drop follows news that the Netherlands' consumer protection regulator, ACM, has launched an investigation into the gaming platform over potential risks to underage users in the European Union. The probe will assess whether Roblox is taking adequate measures to protect minors under the EU's Digital Services Act. The company has faced global criticism and multiple lawsuits in the U.S. related to child safety issues.
Adding to the negative sentiment, analyst firm Wedbush significantly lowered its price target on Roblox to $110 from $165, while maintaining an Outperform rating. The combination of regulatory scrutiny and a reduced valuation outlook from analysts contributed to the stock's downward pressure during the trading session.
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