With the multifaceted ways that technology continues to become integrated into our daily lives, entirely new industries are emerging. This is a trend that should continue as time goes on and reward investors that stay ahead of the curve. For example, there’s a new rapidly growing industry related to video games that investors should be paying attention to. We’re talking about e-sports, which is on track to surpass $1.5 billion in revenue by the year 2023.
If you aren’t familiar with esports, it is a form of sport competition that uses video games. These multiplayer video game competitions attract tons of viewers and allow gamers to compete at the professional level for huge cash rewards. This is a burgeoning industry with tons of potential, especially since we know how infatuated younger generations are with video games. That’s why investors should be looking to buy a company like Skillz Inc (NYSE:SKLZ) at this time, as it’s the first publicly-traded mobile esports platform. Let’s take a deeper look at Skillz Inc below.
Leading Mobile Gaming Platform
Skillz Inc is an interesting business to watch for several reasons. The company is focused on mobile gaming, which many believe is the future of esports as it will reduce barriers for entry and allow more people to gain exposure to the industry. The Skillz platform is used to host and operate gaming tournaments for thousands of game developers. It hosts billions of casual esports tournaments for mobile players all over the world and distributes millions of dollars in prizes each month to the winners of these tournaments.
It’s easy to see why Skillz is such a unique business that is disrupting the gaming industry. Game developers want their games on the company’s platform as it can help them to grow their brand and create potentially massive franchises thanks to the social competition that the platform provides. The company claims that its platform enables developers to monetize their content five times better than ads or in-app purchases. Gamers are also interested in the company’s platform, as it reportedly has over 40 million users at this time.
SPAC Merger and Q3 Top Line Growth
Skillz is another company that has recently pursued going public via a SPAC reverse merger. The company was combined with special purpose acquisition company Flying Eagle Acquisition Corp (NYSE:FEAC) back in December and the stock has been off to a hot start. Since it began trading on December 17th under its new ticker symbol, the stock is up over 38%. As a reminder, SPACs provide an easy path to a public listing for companies that want to avoid market or pricing risks.
The company reported its Q3 and Nine Months year-to-date financial results back in November that confirm Skillz is seeing strong top-line growth. Q3 revenue was up 92% year-over-year to $60 million and the company has generated $162 million in revenue year-to-date, a 91% increase over the prior year. Like most early-stage growth companies, Skillz is reporting net losses, but the top-line growth is certainly impressive. Another interesting tidbit from the earnings report was that Skillz is forming some smart relationships with celebrities and nonprofits to strengthen its brand. The company recently hosted a celebrity tournament offering and held fundraisers for leading nonprofits like the American Cancer Society, which could end up paying off for early investors of the company if Skillz becomes more popular as a result.
The mobile gaming and esports industry is exploding at this time, and Skillz Inc is a company that is well-positioned to take advantage. Investors should note that there are a few strong growth drivers that could help this company grow its earnings and user base substantially over the next few years, including sponsorships, international expansion, advertising revenue, and a steady supply of new games on its platform.
The stock received a nice boost this week after well-known fund manager Cathie Wood’s ARK Next Generation Internet ETF (NYSEARCA:ARKW) announced a new position in the company. The stock has also received several analyst upgrades this week, confirming that the company is gaining more exposure among investors. The bottom line here is that Skillz Inc offers exposure to an industry that has a lot of room to grow and is a company that could be a household name sooner than you think.
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12 Stocks Corporate Insiders are Abandoning
An insider trade occurs when a corporate executive (such as a CEO, CFO, or COO) has non-public information about a company buys or sells shares of that company's stock. Company insiders are required by law to regularly report their stock purchases and sales to the SEC.
Tracking a company's insider trades is a metric that can be used to identify the direction that the company's executives believe that the company is headed. If a number of insiders sell shares of their company, they may believe that the company will have weak future earnings and that the share price will decline in the near future.
For example, if Microsoft's CEO, CFO, and COO all recently sold shares of Microsoft stock, that would be an indication that there could be unreported news that may negatively affect Microsoft's stock price in the near future.
This slideshow lists the 12 companies that have had the highest levels of insider buying within the last 180 days.
View the "12 Stocks Corporate Insiders are Abandoning".