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Entertainment and Sports Law Litigation

Shareholders’ Suit Over Video Game Developer’s IPO

Two former shareholders allege in federal court that an auto-racing video game creator swindled them out of more than $200 million in stock.

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Two former shareholders allege in federal court that an auto-racing video game creator swindled them out of more than $200 million in stock. In a complaint filed last month in the U.S. District Court for the District of Delaware, HC2 Holdings 2 Inc. and Continental General Insurance Co. allege majority shareholder Motorsport Games Inc. portrayed 704Games Co. as being unprofitable and bought out their shares for $1.2 million, then months later went public with shares trading at more than 170 times that buyout value. The latter company developed video games based on NASCAR racing. HC2 Holdings 2 Inc. v. Motorsport Games Inc., 1:21-cv-00165.

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