Short sellers are getting a lot of airplay these days, especially the ones that can severely crumble a stock's price after releasing their reports upon announcing their short position. Many of these short seller reports may have valid data and reasoning that warrant a stock price sell-off, while many allegations are often unsubstantiated. Short sellers are very careful in selecting their words to avoid having their reports construed as investment advice or face libel charges.

However, the one fact that's common with every short seller report is the intent for them to trigger a sell-off in the underlying stocks so they can cash in their short positions on the price decline. Investors are often left in the wake of stomaching losses. However, the impact of the bear raids can often be temporary. Here are three stocks in the computer and technology sector that were targets of short sellers making recoveries.

Roblox: Accused of Inflating DAU Metrics

Hindenburg Research released a bearish short-seller report on October 8, 2024, accusing gaming platform Roblox Inc. (NYSE: RBLX) of overinflating user metrics to inflate the stock price for insiders to sell.

They point out that insiders sold $1.7 billion in stock since going public, with its CEO Baszucki personally selling $150 million of stock.

DAUs Aren't People, But People Count as DAUs

The report claims Roblox is lying to investors and inflating its daily active users (DAU) by 25% to 42%. It points out that Roblox states that DAUs are not a measure of actual unique individuals accessing the platform. DAUs can be counted multiple times for accounts that a single person may run. Hindenburg claims there are numerous bot accounts and individuals with numerous accounts on the site, and the wording in Roblox's official investor communications swaps out "people" regularly with DAUs as in "over 54.1 million people are coming to Roblox ...