Millions of People Will Be Blindsided in 2023. Will You Be One of Them?

On December 13, Louis Navellier, Eric Fry & Luke Lango will reveal the major events that could rock the markets in 2023. Will your money be safe?

Tue, December 13 at 4:00PM ET
 
 
 
 

Is Skillz (SKLZ) Stock the Next Big Short Squeeze?

  • Skillz (SKLZ) stock is up more than 10% on the day, making some wonder if a bigger move is in store for SKLZ stock.
  • The rally comes in the face of the S&P 500 hitting new 52-week lows and puts Skillz back over $1.
  • It’s got investors speculating whether SKLZ stock may be on the verge of a short-squeeze.
SKLZ stock - Is Skillz (SKLZ) Stock the Next Big Short Squeeze?

Source: Dennis Diatel / Shutterstock.com

We’re in the midst of a brutal bear market. Stocks are under intense pressure and the S&P 500 is hitting new 52-week lows. Yet, we’re still looking at potential short squeezes, specifically with Skillz (NYSE:SKLZ). That’s as SKLZ stock is, somewhat miraculously, up about 13% on the day.

The stock is ripping higher on the day without any company-specific news. That’s got traders looking at potential speculation as the main driver of the stock price.

Shares have not had a good run, down in five of the last six weeks. In that span, we’ve seen an incredible peak-to-trough decline of 56% in the stock price. On a longer-term look, SKLZ stock is down in 10 of the last 11 months.

Today’s rally has been enough to send the share price back above the key $1 mark. That level is important as Skillz trades on the New York Stock Exchange, which has certain requirements — like a stock price cannot trade below $1 for 30 consecutive days without facing delisting.

Luckily for investors, SKLZ stock only closed below $1 once (yesterday).

Will SKLZ Stock Enjoy a Short Squeeze?

The fact that Skillz is positive on the day is already pretty impressive. That’s simply from the perspective that the S&P 500 made new 52-week lows on the day and as stocks across the board are being pressured. Despite the outperformance by SKLZ stock, the fact that the stock hit new 52-week lows this week is not encouraging.

While Skillz does have a somewhat elevated short interest of 17% according to Fintel, I don’t know if that alone is enough to trigger a squeeze. Traders generally like to see that number a little higher.

Further, SKLZ stock is not even on Fintel’s Short Squeeze Leaderboard.

During a raging bull market, a speculative short squeeze is possible. I suppose one is also possible on stocks that have suffered a massive peak-to-trough decline, Like Skillz’s 97% fall from its all-time high.

However, given the climate, that’s simply not a speculation that many investors will want to make right now. If it does happen, I don’t suspect it will have a very long runway. At least without cooperation from the rest of the market.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Bret Kenwell 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.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.


Article printed from InvestorPlace Media, https://investorplace.com/2022/09/is-skillz-sklz-stock-the-next-big-short-squeeze/.

©2022 InvestorPlace Media, LLC