Skillz: Back To Earth

 

  • Wolfpack Research released a short report on Skillz.
  • The recently closed SPAC deal was irrationally priced in the stock market with the market cap soaring above $20 billion at the highs.
  • The company must maintain 2021 revenue targets of $366 million despite the headwinds in mobile gaming.
  • Investors must avoid this stock due to valuation and especially if Wolfpack Research is accurate on the upcoming revenue misses.
  • This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »

The upcoming Skillz (SKLZ) earnings report is important for not only the stock, but also the cooling SPAC space. A lot of the blank-check companies have made business combinations based on aggressive 2025+ revenue targets, yet very few of these companies have reported earnings since going public. The real-money gaming platform was already an extremely expensive stock before Wolfpack Research hit the stock with a report suggesting the revenue targets are aggressive and investors should dump the stock.

Read the full article on Seeking Alpha. 


Update - March 19

Skillz sells 32 million shares priced at $24. The company sold 17 million shares to raise $408 million while selling stockholders cashed out 15 million shares. The selling shareholders granted underwriters the option to purchase and additional 4.8 million shares for gross proceeds of $475 million.

For a stock that just went public, shareholders sure want out of the stock. Another massive red flag that Skillz is extremely over valued. 


Disclosure: No position mention. Please review the disclaimer page for more details. 


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