Sports company Skillz Inc. (NYSE: SKLZ) went public on Thursday, becoming the first mobile eSports platform to do so. If you’ve happened to be an investor, it seems like those hours you spent playing games on your phone may have paid off.
But are Skillz stocks a good investment? Or is it simply part of the recent trend of the Special Purpose Acquisition Company (SPAC Investing)? In this article we will take a look at the company behind the IPO and see if we can clarify what to do with Skillz shares.
What is Skillz Inc.?
Simply put, Skillz Inc. is a leading mobile gaming platform. In the words of founder and CEO Andrew Paradise:
We have built Skillz on the fundamental belief that eSports are for everyone and have made significant progress towards our vision of enabling everyone to share the future of competition. We are at the crossroads of mobile gaming and eSports, perhaps the two most exciting growth opportunities of the next decade. I thank the entire Skillz team for their dedication, passion and creativity, which led us to this incredible moment of our journey to build the competitive level of the Internet.
The Skillz platform allows developers to create franchises through the use of social competition in games. This can lead to the creation of multi-million dollar gaming franchises.
Skillz Inc. is at the crossroads of gaming and eSports. Millions of mobile gamers around the world use its gaming platform. And every month, Skillz pays out millions to tournament winners.
Skillz currently has around 2.6 million active users dedicated to its esports and gaming platform. The company went public after the merger with SPAC Flying Eagle Acquisition Corp.
On their website, Skillz. Inc. calls itself “eSports for all”. Some of their most popular games include:
- Lonely cube
- Blackout Bingo
- Pay day at the pool
- Bubble Shooter Arena
- Block Blitz
Skillz Inc.’s generates revenue through competition entry fees, brand sponsorships and in-game ads. The company is based in San Francisco and has received numerous awards, including Fast Company’s Most Innovative Companies and CNBC’s Disruptor 50.
Skillz and the mobile gaming industry
The Skillz stock joins a mobile gaming industry that is currently valued at $ 63 billion worldwide. Experts predict that this sector will grow to $ 100 billion by 2023.
While it may have been every kid’s dream to make money playing video games when I was a kid, mobile games and esports are now clearly huge assets for investors.
Some of us may have thought that mobile games like them candy Crush Saga is Pokémon Go they were just passing fads, but it’s becoming increasingly clear that mobile games are bigger than ever.
Like sports betting titles, video game and esports betting combine the excitement of both video games with gambling. Could the stakes be higher? Maybe not for gamers and certainly not for investors.
Should you invest in Skillz stocks?
At this point, you are probably wondering if you should invest in Skillz shares. Well, that depends entirely on your prospects for the business, esports and mobile gaming industries and your risk appetite.
Currently, Skillz Inc. is trading around $ 23 after opening at around $ 17.89. So some value was left on the table for IPO investors.
But given how much esports and mobile games are likely to remain, as well as Skillz’s position in the industry, there is good reason to think the title could continue to rise over time.
And if you’re interested in knowing what stocks we might like even better than Skillz stocks, check with Bryan Bottarelli and Karim Rahemtulla in their free e-eletter Trade of the day.
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About Brian M. Reiser
Brian M. Reiser holds a bachelor’s degree in management with a major in finance from Binghamton University’s School of Management.
He also holds a BA in philosophy from Columbia University and a master’s in philosophy from the University of South Florida.
His main interests in Investment U include personal finance, debt, technology stocks and more.