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PlayAGS faces class action lawsuit over securities purchases


A class action lawsuit has been filed against PlayAGS after the gaming technology supplier was accused of failing to disclose information about its business, operations and prospects to investors.

The Law Offices of Frank R. Cruz launched the lawsuit on behalf of persons and entities that purchased or acquired PlayAGS securities between August 2, 2018, and August 7, 2019.

On the final day of the period in question, PlayAGS reported a net loss of $7.6m for its second quarter, covering the three months to June 30, 2019.

This included a $3.5m impairment to goodwill charge and $1.3m in impairment to intangible assets of the supplier’s igaming reporting unit, as a result of extended regulatory timelines that delayed revenues.

Upon announcing the financial results, PlayAGS saw its share price fall by almost 52% to $8.31 per share at close on August 8, 2019, due to unusually heavy trading volume.

The complaint alleges PlayAGS did not inform investors of certain information for the period between August 2, 2018, and August 7, 2019. In particular it is accused of failing to flag challenges the business was facing in Oklahoma, which would result in recurring revenue being impacted.

PlayAGS is also accused of not informing its investors that it was experiencing challenges in its interactive business segment, including delays in securing regulatory approvals and relevant licenses.

The lawsuit also said that PlayAGS did not make clear these issues would result in goodwill impairment in its Q2 results, which in turn meant statements made about its business, operations and prospects were “materially false and misleading and/or lacked a reasonable basis at all relevant times”.

Investors that purchased PlayAGS securities during the period have until August 24 to may move to court and request to be appointed as a lead plaintiff.

The Pomerantz Law Firm has also joined the lawsuit and will represent investors as part of the case.