Skillz Inc. (NYSE:SKLZ) saw its stock surge Thursday after an eight-person federal jury in Manhattan found rival Papaya Gaming Ltd. liable for false advertising, awarding $420 million in damages to the mobile gaming company.
The jury also declared that Skillz is entitled to $652 million in disgorgement. Judge Denise Cote is expected to issue a formal decision on the disgorgement amount in early June, the court record shows.
Market reaction was pronounced. Skillz shares climbed as much as 443% to $20 on the New York Stock Exchange during the session before settling up roughly 200% at $11 in afternoon trading.
The verdict concluded a week-long trial held in the US District Court for the Southern District of New York. After the trial, the eight jurors deliberated for just over two days before returning their decision.
At issue in the case were Skillz’s allegations that Papaya misled players by not disclosing occasions when bots, rather than human competitors, were used in certain games and tournaments. Skillz also contended that Papaya advertised having paid $6.7 billion in player winnings, while $4.7 billion of that amount went to games where bots were the winners.
During closing arguments on April 20, Papaya disputed the claims. The company argued there was no evidence it had earned any dollars from the disputed portion of winnings and stated that its total revenue was under $1 billion.
"We 9re pleased with the jury 9s verdict and appreciate the careful consideration of the facts," Skillz said in a statement. "We remain committed to fair competition and to providing a trusted, transparent experience for players and developers."
The trial had been expected to last two weeks but finished earlier than projected after closing arguments were delivered.
The court ruling and the resulting stock volatility highlight the immediate legal and market developments stemming from the case. The judge's forthcoming decision on disgorgement in early June remains a key pending step in the matter.