Today, the meme stock trade appears to be losing some steam. Investors in companies with heavy retail investor interest are down. Accordingly, investors in Skillz (NYSE:SKLZ) and SKLZ stock may not be surprised to see a 5% decline today.
After all, investors may have noticed a relative stagnation among the meme stock group in recent days. Today’s decline has continued a relatively bearish trend for these stocks this past week. Retail investors appear to be recycling interest rapidly. Accordingly, near-term sentiment appears to be a bigger driver than ever today for this group.
That said, the company’s CEO has raised some interesting points in a recent open letter to shareholders.
Let’s dive into what that letter said, and why investors may want to reconsider this stock.
Open Letter Highlights Bullish Thesis on SKLZ Stock
- Andrew Paradise, CEO of Skillz, recently penned an open letter on Seeking Alpha in which he highlighted the growth potential of its e-gaming business.
- Accordingly, Mr. Paradise noted the 23% CAGR of Skillz as an indicator of this growth. Indeed, he notes mobile has become the fastest-growing segment of the gaming space.
- Further, Skillz is well-positioned to capture market share in a rapidly expanding sector. The CEO notes the mobile gaming market is expected to grow to $161 billion by 2025, from just $86 billion last year.
- Thus, the company’s 84% year-over-year growth rate projected for Q1 is something he’d like investors to focus on.
- Skillz expects to ramp up its Android footprint dramatically. Last year, Android made up 14% of revenues. Furthermore, Mr. Paradise noted this segment is growing 2 times faster than iOS.
- Additionally, Skillz has its sights set on global growth. The letter noted the international market for mobile gaming is 4 times larger than the domestic market.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.