Skillz (SKLZ) Stock Surges 238% After $420M Jury Verdict Against Papaya Gaming

TLDR

• A Manhattan federal jury found Papaya Gaming liable for false advertising and ordered it to pay Skillz $420 million in damages
• The jury also ruled Skillz is entitled to $652 million in disgorgement, with a judge set to rule on that amount in early June
• SKLZ surged as high as 443% to $20 on Thursday before closing up 238% at $12.45
• The case centered on Papaya allegedly using bots instead of human players and misrepresenting $4.7 billion of its advertised $6.7 billion in user winnings
• SKLZ then dropped 25% in pre-market Friday trading after the massive Thursday rally

Skillz took on a rival in court — and won big. A Manhattan federal jury ruled Thursday that Papaya Gaming Ltd. engaged in false advertising, ordering it to pay $420 million in damages to the mobile gaming platform.

Skillz Inc., SKLZ

The verdict came after a week-long trial at the US District Court for the Southern District of New York. The eight-person jury deliberated for just over two days before reaching its decision. The trial had been expected to last two weeks but wrapped up early after closing arguments on April 20.

SKLZ stock exploded on the news, jumping as high as 443% to $20 during Thursday’s session before settling up 238.32% at $12.45 at the close, according to Benzinga Pro.

On top of the $420 million damages award, the jury ruled that Skillz is entitled to $652 million in disgorgement. Judge Denise Cote is expected to issue a ruling on that amount in early June.

What Was the Case About?

Skillz accused Papaya Gaming of deceiving players by using bots in certain games and tournaments without telling users. Skillz also claimed Papaya advertised it had paid out $6.7 billion in winnings — but that $4.7 billion of that total went to games where bots, not humans, were the winners.

During closing arguments, Papaya pushed back. The company said there was no evidence it earned a single dollar from that portion of the money, and pointed out its total revenue came in at under $1 billion.

The jury sided with Skillz.

Friday Pullback After the Rally

What goes up fast can come back down quickly. After Thursday’s explosive move, SKLZ dropped 25.14% to $9.20 in pre-market trading on Friday.

That kind of pullback after a sharp single-day move is not unusual for a small-cap stock.

Skillz carries a market cap of $194.23 million. Its 52-week high sits at $20 — hit during Thursday’s intraday spike — and its 52-week low is $2.23. The stock is currently positioned about 57.51% above that low.

The Relative Strength Index for SKLZ stands at 91.38, deep in overbought territory. Over the past 12 months, the stock has gained 159.38%.

Benzinga’s Edge Stock Rankings show SKLZ is experiencing a positive price trend across all time frames.

Judge Cote is expected to issue her decision on the $652 million disgorgement claim in early June.

The post Skillz (SKLZ) Stock Surges 238% After $420M Jury Verdict Against Papaya Gaming appeared first on CoinCentral.