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Highlights
- Skillz (SKLZ) stock has been gaining momentum for the past two days despite no updates from the company.
- SKLZ stock surged by 15 per cent during pre-market hours on Wednesday, September 1.
- Skillz is into online multiplayer video games and gives a platform to its users to compete in global competitions.
Stocks of Skillz Inc. (NYSE:SKLZ, SKLZ:US) shot up by 6.5 per cent to trade at US$ 12.53 per share at opening bell on Wednesday, September 1, ranked high among the day’s trending charts. The mobile game development company’s stock had surged by about 15 per cent in the premarket trading hours.
The San Francisco-based company develops online multiplayer video games and gives a platform to its users to compete in competitions against other players in the world.
Its latest stock price rise came despite a lack of any official announcement from the company that could have caused the surge in share prices. Hence, the spike could have been caused by an emerging meme stock rally.
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Skillz stock’s name has reportedly surfaced on the day-trading discussion forums on social media platform Reddit.
Since the beginning of this year, retail investors on Reddit have caused a share price surge for many companies, including those with poor fundamentals. Such meme stock rallies have seen companies like GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) surge massively on the stock markets.
Skillz (NYSE:SKLZ) stock performance
Based on its price performance, SKLZ scrip seems to be one of the highly volatile stocks on Wall Street. The gaming shares have declined by 41 per cent year-to-date (YTD) and fallen by about 31 per cent in the last three months.
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Despite the increase in its revenues in Q2 2021, which grew 52 per cent year-over-year (YoY) to US$ 89.5 million, Skillz failed to reduce its loss in the second quarter of this year. The online gaming company’s net loss expanded to US$ 79.6 million in Q2 2021, up from US$ 20.2 million in Q2 2020.
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Skillz also failed to retain its monthly active users (MAUs) as the number declined to 2.4 million MAUs in Q2 2021, down from 2.6 million MAUs in the same comparable period last year.
As a result, its average revenue per paying user decreased to US$ 64.36 in the latest quarter.
Bottom Line
The growth of the e-sports company seems to be off-track as per the company’s full-year guidance. In the second quarter of 2021, Skillz announced that it expects an increase of about US$ 1 million by the end of this year.
Skillz now expects to clock revenues of US$ 376 million instead of US$ 375 million in 2021.
