Robbins Geller Rudman & Dowd LLP announces that a class action lawsuit has been filed in the Northern District of California on behalf of purchasers of Skillz Inc. f/k/a Flying Eagle Acquisition Corp. (NYSE:SKLZ) securities between December 16, 2020 and April 19, 2021 (the "Class Period"). The case is captioned Jedrzejczyk v. Skillz Inc. f/k/a Flying Eagle Acquisition Corp., No. 21-cv-03450, and charges Skillz and certain of its executives with violations of the Securities Exchange Act of 1934.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Skillz securities during the Class Period to seek appointment as lead plaintiff in the Skillz class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Skillz class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Skillz class action lawsuit. An investor’s ability to share in any potential future recovery of the Skillz action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Skillz class action lawsuit or have questions concerning your rights regarding the Skillz class action lawsuit, please provide your information here or contact counsel, J.C. Sanchez of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the Skillz class action lawsuit must be filed with the court no later than July 7, 2021.
Skillz provides a proprietary gaming platform for mobile gaming users and developers. Skillz connects players worldwide by hosting fee-based competitive eSports games on its platform. Flying Eagle Acquisition Corp. ("FEAC") was formed as a special purpose acquisition company, or SPAC, in early January 2020 by its sponsor Eagle Equity Partners II, LLC, led and controlled by defendant Harry Sloan. Within eight months, FEAC and Sloan secured $158 million in private placement commitments in connection with a business combination between FEAC and its target – Skillz. FEAC and Skillz finalized their merger, valuing Skillz at $3.5 billion, on December 16, 2020.
The Skillz class action lawsuit alleges that, throughout the Class Period, defendants issued materially misleading statements and omissions including representations relating to certain of Skillz’s business operations, performance metrics, and ultimate valuation, including, among others: (i) Skillz’s ability to attract new end-users, (ii) future profitability, (iii) the shrinking popularity of Skillz’s hosted games that accounted for 88% of its revenue, and (iv) Skillz’s valuation. The Skillz class action lawsuit also alleges that one of Skillz’s objectively unrealistic promises included the unsupportable claim that Skillz was valued at $3.5 billion, based on revenue projections in excess of $550 million for 2022. However, Skillz allegedly failed to inform investors that downloads of games accounting for a majority share of Skillz’s revenue had been declining since at least November 2020.
On March 8, 2021, Wolfpack Research released a report titled: "SKLZ: It Takes Little Skill to see this SPACtacular Disaster Coming," alleging that the growth speculations that Skillz and its insiders had touted were "entirely unrealistic." Specifically, the Wolfpack Research report alleged, among other things, that the three games Skillz relies on for 88% of its revenue had begun to decline prior to Skillz going public. Downloads of these games all declined by 52% (21 Blitz), 40% (Solitaire Cube), and 20% (Blackout Bingo) in the fourth quarter of 2020. The Wolfpack Research report concluded that Skillz buried this decline in downloads and revenue in its disclosures while continuing to tout massive future revenue growth. The Wolfpack Research report further stated that Skillz has a history of boasting about future partnerships that either do not have tremendous value, or never amount to anything. On this news, the price of Skillz shares fell by nearly 11%.
Then, on April 19, 2021, Eagle Eye Research posted an anonymous report on Twitter in which it claimed that, through the use of providing users with incentive bonus payments, Skillz "likely recognizes substantial non-cash revenue, and . . . cash revenue may be less than ½ of GAAP revenue." On this news, the price of Skillz shares fell an additional 6%, further damaging investors.
Robbins Geller Rudman & Dowd LLP has launched a dedicated SPAC Task Force to protect investors in blank check companies and seek redress for corporate malfeasance. Comprised of experienced litigators, investigators, and forensic accountants, the SPAC Task Force is dedicated to rooting out and prosecuting fraud on behalf of injured SPAC investors. The rise in blank check financing poses unique risks to investors. Robbins Geller Rudman & Dowd LLP’s SPAC Task Force represents the vanguard of ensuring integrity, honesty, and justice in this rapidly developing investment arena.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. ISS Securities Class Action Services has ranked Robbins Geller as one of the top law firms in the world in both amount recovered and total number of class action settlements for shareholders every year since 2010. The SCAS 2020 Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other plaintiffs’ firm. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations, and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.
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Robbins Geller Rudman & Dowd LLP
J.C. Sanchez, 800-449-4900