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Skillz stock (SKLZ) is up as Pandemic rises more time on online gaming

Skillz is a company that created a competition platform for online multiplayer mobile video games. In this platform, games are turned into eSports which means that players can compete with other players not only for the fun of the game, but also for a prize. This idea is relatively new to many since most of the organized competition events are races, sports tournaments, but not mobile games.

This alone had made the company stand out and looked very promising. The company has recorded about two million tournaments on a daily basis, which in total amounts to over 800 million tournaments.

Since the company had gone public in May of 2020, the company has already experienced its ups and downs. They had an incredible run that lasted for about 3 months from December 2020 until February of 2021. This is also the period when the stock reach peak value of $46.30 per share.

This is due to the acquisition they had and the announcement of a partnership with NFL, which confirmed the ideas of investors that the premium valuation on this high-growth company is well deserved. The team up with NFL includes a multiyear gaming agreement and that solidified the position of Skillz. Just imagining the number of NFL fans that could potentially move to the gaming platform is enough to ensure the rapid growth of the company.

The company then provided guidance and anticipated that the revenue may as much as double come Q4 of 2021, purely based on the expected growth. But there lies the problem. Early in March, a short-seller report from Wolfpack Research came in stating that the company’s growth has considerably slowed and that the estimates that the company are releasing are impossibly hard to achieve. This has caused the SKLZ stock to plummet to as low as $10.26 per share.

The company has then adjusted expectations to 63% higher versus 2020 revenue even with the Q1 2021 reports showed that the company has performed well. The damage to the valuation was retained, but the SKLZ is still attempting to get back up specially after they acquired the company Aarki that focuses in advertising technology.

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