Today, short squeeze mania has hit a new gear. Investors looking to get in on the action are targeting any company with relatively high short interest. And Skillz (NYSE:SKLZ) and SKLZ stock appear to be just the perfect target for such investors.
Indeed, Skillz is a company that has been in the cross-hairs of short squeezers everywhere for some time. The company’s current short volume ratio of 27% is relatively high, and puts this company in consideration as a top short squeeze candidate.
Indeed, seeing the moves in other high-profile short squeeze plays today, Skillz’s move of roughly 24% at the time of writing seems muted. However, it’s a speculator’s world today.
Accordingly, any company with a higher-than-average short volume ratio is getting bid up hard.
That said, this isn’t the only catalyst driving Skillz today. Let’s take a look at another reason why SKLZ stock is taking off.
Acquisition Announcement Boosting SKLZ Stock
Today, Skillz announced the acquisition of Aarki, a leading technology-driven marketing platform.
The $150 million cash and stock deal provides Skillz with access to “a growing demand-side platform with global scale and a proven track record in the mobile gaming market.” The ability for Skillz to take advantage of Aarki’s machine learning capabilities is what the company hopes will be able to take its growth to the next level.
As many investors know, Skillz’s business model depends heavily on generating new users via its marketing efforts. The acquisition cost of new users on the company’s core digital games has been relatively high. Investors seem to be bullish on this acquisition as a way to lower the overall user acquisition cost.
Additionally, it appears investors are liking the integrated ecosystem potential resulting from this combination. If Skillz can effectively us Aarki’s proprietary learning algorithms to optimize Skillz’s robust first-party data, investors hope this will result in a long-term win in terms of share price appreciation.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
