On August 7, 2019, PlayAGS reported a net loss of $7.6 million for second quarter 2019 which included a $3.5 million impairment to goodwill and a $1.3 million impairment to intangible assets of the Company’s iGaming reporting unit, due to extended regulatory timelines which delayed revenues.
On this news, the Company’s share price fell $8.99, or nearly 52%, to close at $8.31 per share on August 8, 2019, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that PlayAGS was experiencing challenges in its business in Oklahoma; (2) that, as a result, the Company’s recurring revenue would be negatively impacted; (3) that PlayAGS was experiencing challenges in its Interactive business segment, including delays in securing regulatory approvals and relevant licenses; (4) that, as a result of the foregoing, PlayAGS was reasonably likely to record a goodwill impairment; and (5) that as a result, Defendants’ statements about the Company’s business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
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