Robbins Geller Rudman & Dowd LLP Announces Upcoming Lead Plaintiff Deadline in the Skillz Inc. f/k/a Flying Eagle Acquisition Corp. Class Action Lawsuit - Seite 2

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.