The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who (1) acquired Playstudios, Inc. (“Playstudios” or the “Company”) (NASDAQ: MYPS) securities from June 22, 2021 through March 1, 2022 (the “Class Period”); (2) held common stock of Acies as of May 25, 2021, eligible to vote at Acies’ June 16, 2021 special meeting; and/or (3) purchased or otherwise acquired Playstudios common stock pursuant to or traceable to the Acies’ Registration Statement and Proxy Statement issued in connection with the June 2021 Merger. Investors have until June 7, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Acies is a “blank check” special purpose acquisition company (“SPAC”) formed in October 2020 for the purpose of entering a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more business entities or entities in the media, entertainment, or marketing services industries.
On February 1, 2021, Acies announced that it had reached a merger agreement with Playstudios (“Old Playstudios”), a privately-held gaming company incorporated under the laws of Delaware (the “Merger” or “Merger Agreement”). In the press release announcing the Merger, Playstudios announced that the transaction implied an enterprise valuation for Playstudios of $1.1 billion and that the consideration to Old Playstudios shareholders for the Merger would comprise at least 89.1 million shares Acies common stock, worth $10 per share, up to $150 million in cash, and a $250 million investment PIPE of common stock of Acies.
On August 11, 2021, the financial results reported for the quarter were finalized on June 30, 2021, just nine days after the Merger closed. At that time, Playstudios revealed for the first time that the Kingdom Boss launch was being delayed until later in the year and investors should expect decreased revenues and profits during the year as a result. On this news, the Company’s stock price declined by $0.66 per share, or approximately 11.48%, from $5.75 per share on August 11, 2021 to close at $5.09 per share on August 12, 2021.
On February 24, 2022, Playstudios filed its annual report for 2021 with the SEC and issued a press release summarizing financial results for the fourth quarter and year ended December 31, 2021. On this news, the Company’s stock price declined by $.24 per share, or approximately 4.71%, from $5.10 per share on February 24, 2022 to close at $4.86 per share on February 25, 2022.
The lawsuit alleges throughout the Class Period, Defendants made misleading statements and omissions regarding the true state of Playstudios’ development of Kingdom Boss and about its financial projections and future prospects in the Registration Statement and Proxy Statement and subsequent statements. The projections were expressly premised on a successful and timely launch of Playstudios’ highly anticipated flagship game, Kingdom Boss. In the Registration Statement and Proxy Statement, Playstudios told investors that “Kingdom Boss, which began development in 2020, will launch as expected in the second half of 2021” (emphasis added). However, at the same time that the projections of revenue and profits were being publicly made in SEC filings, defendants knew that Kingdom Boss had encountered difficulties in its design and implementation that would cause the launch to be substantially delayed. In fact, these difficulties resulted only a few months later in the public admission that Kingdom Boss would never be launched. Consequently, the 2021 and 2022 projected revenues and profits were inflated and unreliable.