SHAREHOLDER ALERT: Robbins LLP Announces That Skillz Inc. (SKLZ) f/k/a Flying Eagle Acquisition Corp. is Being Sued for Misleading Shareholders

SAN DIEGO & SAN FRANCISCO--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of Skillz Inc. (NYSE: SKLZ) f/k/a Flying Eagle Acquisition Corp. filed a class action complaint against the Company and its officers and directors for alleged violations of the Securities Exchange Act of 1934 between December 16, 2020 and April 19, 2021. Skillz is an internet tech company that provides a proprietary gaming platform for mobile gaming users and developers.

If you suffered a loss due to Skillz Inc.'s misconduct, click here.

Skillz Inc. (SKLZ) Made Misstatements Regarding its Purported Financial Condition and Prospects

According to the complaint, Flying Eagle Acquisition Corp., a special purpose acquisition corporation, and Skillz consummated their merger on December 16, 2020. The merger valued Skillz at $3.5 billion. This valuation, however, was overstated as it relied on revenue projections that had little basis in reality. A substantial portion of Skillz's revenue is generated through Skillz's own cash, which it provides to its gamer customers in the form of Bonus Cash incentives. Skillz's gamer customers recycle these funds back into the Company as entrance fees and Skillz records it as revenue.

Throughout the relevant period, Skillz touted its positioning in the market, noting its revenue and earnings growth potential. At the same time, it failed to inform the investing public of the declining downloads and installs of its three most revenue producing games that accounted for 88% of its revenue.

On March 8, 2021, Wolfpack Research released a report titled, "SKLZ: It Takes Little Skill to see this SPACtacular Disaster Coming." The report described how: (i) third-party app data shows installations of the three games responsible for 88% of Skillz's revenues declined substantially; (ii) Skillz did not disclose the substantial decrease in the popularity of these three games; (iii) Skillz is not taken seriously by gaming industry players; (iv) Skillz has a long history of boasting about "big partnerships" which have amounted to nothing of value; and (v) CEO Paradise does not have the relevant experience that has been expressed. On this news, Skillz stock fell almost 11%, to close at $24.45, down $3 from the previous day, causing the Company to lose almost $762 million in market value.

Then, on March 15, 2021, a Twitter user known as "@Restrinct" published a reporting highlighting issues with Skillz's unsustainable business model, unrealistic growth projections, and tremendous sales and marketing spending. On April 19, 2021, Eagle Eye Research posted an anonymous report on Twitter stating that Skillz is "recognizing revenue from 'virtual' money it gave customers to spend although no real cash is generated in the process." On this news, Skillz shares declined 6.61% to close at $14.11 on April 19, and then further declined to $12.55 the following day, representing another $254 million in lost market value.

Skillz's confirmed its over-hyped valuation on May 5, 2021, when it announced its earnings for first quarter 2021, which reflected a net loss of $53.6 million.

If you purchased shares of Skillz Inc. (SKLZ) f/k/a Flying Eagle Acquisition Corp. between December 16, 2020 and April 19, 2021, you have until July 7, 2021, to ask the court to appoint you lead plaintiff for the class.

All representation is on a contingency fee basis. Shareholders pay no fees or expenses.

Contact us to learn more:

Lauren Levi
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Shareholder Information Form

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