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The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of Skillz Inc. f/k/a Flying Eagle Acquisition Corp. (NYSE: SKLZ) who purchased shares between December 16, 2020 and April 19, 2021. The action, which was filed in the United States District Court for the Northern District of California, alleges that the Company violated federal securities laws.
In particular, the Skillz Inc. lawsuit alleges that representations relating to certain of Skillz’s business operations, performance metrics and ultimate valuation, including, among others, Skillz’s ability to attract new end-users, future profitability, the shrinking popularity of its hosted games that accounted for 88% of its revenue, and the Company’s valuation. For example, one of the Company’s objectively unrealistic promises included the unsupportable claim that the Company was valued at $3.5 billon, based on revenue projections in excess of $550 million for 2022. However, the Company failed to inform investors that downloads of the games that account for a majority share of its revenue have been declining since at least November 2020. In reality, the Company’s prospects for attaining that revenue scale was far from realistic given its size, market share, reliance on thirdparty app stores, declining downloads of its most popular games and, critically, the enormous amount of incentive Bonus Payments that Skillz routinely provides to its gamer customers, a fact that investors were misled about. These Bonus Payments are routinely provided to its customers, who are expected to use them for game entry fees, which, in turn, artificially inflates Skillz revenue.
Shareholders have until July 7, 2021 to petition the court for lead plaintiff status. Your ability to share in any recovery does not require that you serve as lead plaintiff. You may choose to be an absent class member.
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