Skillz Inc. (NYSE:SKLZ) shares dropped 6.77% to $8.12 in the pre-market trading session on Wednesday after the mobile gaming platform disclosed a partnership dispute that could impact revenue streams.
Check out the current price of SKLZ stock here.
Developer Partnership Terminated
Tether Studios LLC and Tether Games Inc. notified Skillz on Aug. 29 of their intent to terminate all agreements effective from Sep. 1. The partnership involved revenue sharing from entry fees paid by users playing Tether-developed games on Skillz’s platform.
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Under the terminated agreements, the Nevada-based esports platform provided Tether with software development kit licensing for monetization services. The companies shared revenue generated from aggregate user entry fees, representing a material revenue source for the gaming platform.
Legal Action Filed
Skillz filed suit in Delaware’s Court of Chancery on Monday, seeking injunctive and declaratory relief. The company disputes Tether’s termination notice, calling it “invalid and in breach of Tether’s obligations.”
Tether cited both convenience and cause grounds for termination, with cause provisions effective September 28, if convenience termination fails legal challenge.
Game Hosting Restrictions
Certain agreements restrict the removal of two key games—Solitaire Cube and 21 Blitz—from Skillz’s platform for 18 months post-termination. Skillz retains hosting options for paid competitions during this period, but faces potential revenue impact.
Market Impact and Outlook
According to Benzinga Pro data, SKLZ stock closed at $8.71 on Tuesday and has gained 73.16% so far in 2025, and 56.94% over the past year, despite recent volatility. The company’s market capitalization stands at $133.26 million.
Skillz acknowledged litigation uncertainties, stating it “can provide no assurances regarding the outcome of the claim and the impact it may have on the Company’s business.” The dispute adds to existing legal challenges, including ongoing litigation with Voodoo SAS and Papaya Gaming.
With a strong Momentum in the 88th percentile, Benzinga’s Edge Stock Rankings indicate that SKLZ is experiencing a negative price trend across all time frames. Know how its momentum lines up with other well-known names.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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