So far, online mobile gaming technology platform Skillz (NYSE:SKLZ) hasn’t turned out to be the big winner of 2021 that some traders hoped it would be. As it turned out, SKLZ stock popped early in the year but then crashed.
Now, it’s time to pick up the pieces and re-evaluate. Is Skillz a strong buy now, or are the best times in the rear-view mirror?
It’s a tough call, to be sure. A year and a half after the onset of Covid-19, there future of mobile-game-based tournaments is unclear.
So, Skillz will have to prove itself to skeptical investors. What we can say, though, is that a famous fund is reaffirming its stake in Skillz – and a highly experienced gaming executive is joining the team and adding value.
A Closer Look at SKLZ Stock
Back when SKLZ stock soared from $27 to $46.30 in February, the outlook was bright. The bears had completely gone into hibernation – but just for a moment.
If that rally was precipitated by Reddit users, it appears that they weren’t willing or able to keep up the momentum. Unfortunately, some folks who chased the stock in February probably ended up holding the bag.
Painfully, SKLZ stock fell below $20 in April and even touched $8 in October. There was a recovery to $11 by the end of that month, though.
I should also mention that Skillz has trailing 12-month earnings per share of -72 cents.
That’s not terrible when the stock’s above $10, but it would be great to see Skillz turn profitable on a per-share basis in the near future.
Back Into the Ark
Not long ago, I reported that Cathie Wood’s well-known fund, the ARK Innovation ETF (NYSEARCA:ARKK), sold just under 1 million shares of SKLZ stock on Sept. 29.
This was a big deal, as Wood and her funds are influential among today’s traders.
I emphasized that the ARKK fund probably didn’t divest the Skillz shares due to any problems with Skillz as a business.
Bear in mind, Skillz has enjoyed 22 consecutive quarters of revenue growth.
It’s possible that Wood’s fund simply wanted to take profits. Moreover, the fund may have sought to free up capital to invest in other businesses.
In any case, it appears that Wood likes the company now, as reportedly ARK Invest recently purchased 2.11 million shares of Skillz.
Now, I’m certainly not suggesting that anyone should just mimic Wood’s funds in their own investment accounts.
Rather, we can take this as a lesson that funds can buy and sell shares of a company, and these trades don’t necessarily reflect poorly on the company itself.
Big Addition to the Team
One way to enhance a business’s credibility is by onboarding great talent at the executive level.
That’s precisely what Skillz is doing, as the company just appointed Vatsal Bhardwaj as the company’s chief product officer.
He’s a highly experienced gaming executive who recently served as the general manager and director of game tech for Amazon (NASDAQ:AMZN) business segment Amazon Web Services (AWS).
Prior to joining Amazon, Bhardwaj served as head of product for various groups at Facebook (NASDAQ:FB).
There, he managed projects and teams across the engineering, product management, game design, production and other segments.
Bhardwaj will be busy at Skillz. His roles will include:
- Leading the product and technology teams
- Driving the creation of new services and products from concept, development and go-to-market
- Helping to scale the teams, operational practices and systems
- Working with his team to build and operationalize the company’s product road map
The Bottom Line
Without a doubt, Bhardwaj will prove to be a tremendous asset to Skillz.
And if a Wood-led fund wants to stock up on the company’s shares, that’s not a bad sign at all.
Overall, the risk-to-reward profile looks favorable for SKLZ stock. Hopefully, the shareholders will enjoy a nice rally before the year is over.
On the date of publication, David Moadel 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.
