Skillz: Wait For The Bottoming Out Process To End
- Skillz has fallen all the way to $9 after initially soaring to $46 on hype surrounding fast growth.
- The company hasn't proven that high spending on marketing leads to better long-term economics.
- The stock has a more appealing valuation of $4 billion, but Skillz remains a falling knife to avoid for now.
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As with a lot of the original hot SPACs, Skillz (SKLZ) came out of the gate red hot based on massive revenue growth projections. Unfortunately, the market didn't fully research the factors driving those high growth rates. My investment thesis is far more Neutral on the stock now, but my view needs the company to improve user numbers before turning fully Bullish.
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Update - Nov. 3
Skillz reports after the close with the stock jumping into earnings. While the Big Buck Hunter game appears a success, the iOS privacy issues hitting marketing appears a bigger issue for the mobile gaming platform. The company is highly reliant on UA to acquire new users setting up Skillz for failure.
- Skillz Platform (NYSE:SKLZ) is scheduled to announce Q3 earnings results on Wednesday, November 3rd, after market close.
- The consensus EPS Estimate is -$0.12 and the consensus Revenue Estimate is $102.61M.
- In Q2, the company's paying monthly active users grew 53% Y/Y to 463,000.
- The company also launched 'Big Buck Hunter' game on its app during Q3, which reached a Top-3 rank in the popular sports category on the app store, as per the management.
Update - Oct. 6
Cathie Wood's ARK sold nearly 1 million shares on 10/5 when the stock traded below $9 in an ugly sign for Skillz.