Why Skillz Stock Was Up Today
Mobile gaming platform actions Skillz (NYSE: SKLZ) took a big step today – up 6% as of 1:20 p.m. EDT. This continues the stock’s strong advance over the past month, with the stock now rising 35% in the past 30 days. But oddly enough, there wasn’t a lot of background news for shareholders, which still seems to be the case today.
It appears that some investors are seeing a correlation between Skillz’s gains today with the new legislation in Canada. The Senate of Canada on Tuesday approved Bill C-218, allowing Canadian citizens to bet on sports games like hockey and football (but do not horses race). However, this does not appear to be fundamental news for Skillz shareholders. The Skillz platform is already accessible in Canada. Also, it doesn’t offer play for sports games anyway. After all, betting on the outcome of a hockey game is more a game of luck than skill.
Image source: Getty Images.
Skillz’s platform also features newer titles that receive good reviews from the Apple App Store. They include Match Two Rivals – Pair Puzzle and Word race in hyperspace, who both score five out of five points. But these journals represent very small sample sizes. Also, these games haven’t released today, so there is no reason to believe that they are moving the stock.
Finally, some investors point out the high amount of short interest in Skillz shares as part of this happening. According to Yahoo Finance, around 24% of the free float in Skillz shares is sold short. High short-term interest like this always attracts the attention of a crowd of traders keen to trigger some sort of short squeeze due to their collective buying pressure.
If that’s what drives Skillz stock today, then long-term investors really have nothing to do. Stocks rise and fall in the short term – sometimes quite sharply – and that’s something we accept as part of the game. We try not to look at daily fluctuations, but rather to focus on what will make or break. an investment thesis over the years.
With Skillz, there is a lot to love in the long run. But there was nothing that materially changed for better or worse today for that long-term outlook.
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Jon Quast owns shares of Skillz Inc. The Motley Fool owns shares and recommends Skillz Inc. The Motley Fool has a disclosure policy.
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