A new controversy between financial research firm Hindenburg Research and Edwin Dorsey, the blogger behind StockJabber and The Bear Cave, has sparked a debate about originality, credit, and ethics in financial journalism. What started as mutual admiration has now evolved into a public spat, with both sides doubling down on their claims and responses. 

At the center of the conflict are reports on safety and child abuse issues on the online gaming platform Roblox, as well as alleged plagiarism by Hindenburg.

Roblox: The Beginning

On October 9, 2024, Edwin Dorsey publicly criticized Hindenburg Research for failing to acknowledge his earlier reports on Roblox. Dorsey wrote on X, “I like @HindenburgRes and think they generally do pretty good work. That said, it’s always a little frustrating to see someone talk about virtually identical problems with no shout-out or citation at all.”

Hindenburg released a report the day before entitled “Roblox: Inflated Key Metrics For Wall Street And A Pedophile Hellscape For Kids”, which discussed how the company is misleading investors by inflating user metrics and creating a dangerous environment for children. Roblox, a gaming platform valued at $27 billion, has faced mounting scrutiny over financial losses and allegations of inadequate content moderation, with Hindenburg’s report exacerbating concerns.

The report accused Roblox of inflating its daily active user (DAU) metrics by as much as 42% through the inclusion of alternate accounts and bots. It also criticized Roblox for providing inadequate safeguards against child predators on the platform.

Roblox has denied these allegations, calling the report “misleading.” The company stated that it reports metrics according to transparent definitions and ensures that its content moderation systems reflect global trends in engagement. “We totally reject the claims made in the report,” Roblox said, adding that Hindenburg’s financial interests as a short-seller compromised the objectivity of the report.

Dorsey highlighted that he had been covering issues of child safety and inappropriate content on Roblox since 2022 and expressed disappointment that none of his work was cited in Hindenburg’s report.

“This also happened with $LFST where @BearCaveEmail on the company six months before Hindenburg, never got a citation,” Dorsey noted, referring to an earlier report he published about LifeStance Health. He further claimed, “If you want the big story weeks or months before Hindenburg publishes…then be sure to sub to @BearCaveEmail” .

According to Dorsey, the frustration stemmed not only from the lack of credit but also from the perceived overshadowing of his investigative work by Hindenburg’s more comprehensive and publicized reports.

Dorsey also argued that his smaller platform had been undermined by Hindenburg’s broader reach, leading to his work being unfairly overshadowed. “I’ve been writing about Roblox child abuse starting in 2022…and not even one mention in their ~18,000-word report,” Dorsey lamented in one of his posts.

Hindenburg’s Response: “Problems With Ed Dorsey”

Hindenburg Research, known for targeting high-profile companies with in-depth reports, refuted Dorsey’s claims in a series of posts by its founder Nate Anderson. Anderson stated that Hindenburg’s 75-page, 18,000-word report on Roblox, released on October 8, 2024, was based on independent investigation.

Anderson emphasized that the company cited over 300 sources, including Bloomberg and YouTuber Ruben Sim, who has documented issues with Roblox for nearly a decade.

“Our report referenced Roblox’s child grooming chat rooms, which we had learned about from YouTuber Rubin Sim,” Anderson explained, pointing out that Dorsey had also acknowledged Rubin Sim’s work as foundational to his own research.

Anderson added that Hindenburg’s research involved collecting court documents, conducting interviews, and assembling proprietary data, processes that took months to complete.

“Edwin apparently Googled some of the same stuff we did and created a similar list ordered in a chronological fashion,” Anderson wrote.

He maintained that Dorsey’s complaints were baseless, suggesting that any overlap was coincidental or a result of both parties working with publicly available information .

The dispute touches on larger themes of credit and originality within financial journalism. Anderson dismissed Dorsey’s plagiarism allegations as a strategic move to gain engagement.

“Rather than acknowledge that we did deeper work that covered more issues, he decided to try to turn our work into an engagement opportunity,” Anderson stated, suggesting that Dorsey was motivated by frustration over the higher visibility of Hindenburg’s report.

Anderson also noted that Dorsey himself acknowledged the issue and “understood how we developed our work independently”, even attaching the now-deleted post where Dorsey concluded that there was no bad intent on Hindenburg’s part.

Dorsey even reposted the Hindenburg’s report when wit was published on X.

Dorsey Rebuts: “Very Selective Disclosure”

In a follow-up post on X, Dorsey remarked, “You are doing some very selective disclosure around Hindenburg’s potential plagiarism and making false allegations of your own.”

Dorsey argued in his rebuttal posts that Hindenburg’s defense misses the core of his complaint: credit.

“It’s inconceivable that I’d see someone I know write extensively on a company, then write on the exact same topic, and not mention them even once,” he said.

Dorsey emphasized that he routinely cites other activists’ work, including YouTuber Rubin Sim, whose videos informed both The Bear Cave and Hindenburg’s reports on Roblox.

In a pointed critique, Dorsey argued that the size and scope of Hindenburg’s operations make it all the more necessary for them to provide proper citations. “You have a team, I work alone,” he said. “That doesn’t mean you can’t or shouldn’t cite The Bear Cave when appropriate.”

Dorsey has also encouraged independent journalists to scrutinize Hindenburg’s response and compare it with his original work for deeper insights.

“There may be more here beyond me and Roblox,” he warned, implying that this may not be an isolated case of missing credit from Hindenburg.

Regarding the post the Dorsey deleted thereafter, he claimed that he later realized “there were a lot more issues than originally discussed.”

“I also felt like the call was not entirely truthful as I evaluated more information,” he added.

The feud between Dorsey and Hindenburg highlights broader tensions in the world of activist short-selling. For independent analysts like Dorsey, recognition and transparency are crucial for building credibility. At the same time, larger firms like Hindenburg, with more resources and higher visibility, face increased pressure to be meticulous in their research practices.

While both parties agree that overlapping investigations are inevitable in financial research, the key point of contention remains whether proper credit was given where due. “I almost always mention past work when I publish on a company someone else has written about,” Dorsey said, criticizing Hindenburg’s failure to do the same. “It seems like you went out of your way to cite everyone but The Bear Cave”.

As Dorsey noted in a final remark, “We can have different views on the right approach, but that in no way means you can’t or shouldn’t cite The Bear Cave when appropriate.” Anderson, for his part, wished Dorsey “the best in the future” but stood firm in his belief that the accusations were baseless.

Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.