Skillz stock tumbles after Tether Studios seeks to terminate agreements
Investing.com -- Skillz Inc. (NYSE:SKLZ) stock dropped 11.6% in premarket trading Wednesday after the company disclosed that Tether Studios intends to terminate all agreements with the gaming platform provider.
According to a regulatory filing, Skillz received a termination notice from Tether Studios on August 29, with Tether seeking to end all agreements effective September 1. The notice affects key revenue-generating games including Solitaire Cube and 21 Blitz. Skillz maintains that the termination notice is "invalid and in breach of Tether’s obligations."
Under the existing agreements, Skillz provides Tether with licensing for its Software Development Kit to monetize games, with both companies sharing revenue from user entry fees. The agreements contain provisions that would restrict the removal of Solitaire Cube and 21 Blitz from Skillz’s platform for at least 18 months following termination.
In response to the notice, Skillz filed suit in Delaware’s Court of Chancery on September 1, seeking injunctive and declaratory relief. The company is disputing both Tether’s right to terminate for convenience and its alternative grounds for termination for cause, which Tether claims would become effective September 28 if the convenience termination is not upheld.
Skillz acknowledged in its filing that it "can provide no assurances regarding the outcome of the claim and the impact it may have on the Company’s business."
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