Playtika Secures Dismissal in Shareholder Suit

Stradling secured a win at the Second Circuit Court of Appeals in a securities class action for Playtika (NAS: PLTK), a publicly traded technology company that develops mobile games.  The shareholder plaintiffs asserted a claim under Section 11 of the Securities Act contending that, on a call with securities analysts and investors, the company revealed previously undisclosed infrastructure changes to its two most successful games, Slotomania and Bingo Blitz. The shareholder plaintiffs alleged those infrastructure changes interrupted the introduction of new content, resulting in a stock drop of 23.  Stradling filed a motion to dismiss, resulting in the U.S. District Court for the Eastern District of New York dismissing the complaint with prejudice.

On appeal, the Second Circuit affirmed on all grounds.  Chief Judge Debra Livingston wrote that the company’s “Registration Statement included ‘critical qualifying information’ warning investors that Playtika may not be able to in-fact release new features at a ‘constant cadence’.”  The Second Circuit rejected the plaintiffs’ allegations as “merely conclusory” that “Playtika had a plan in place to implement” the infrastructure changes “before or at the time the IPO occurred.”