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Can Mobile Esports Company Skillz Inc.’s IPO Level Up for Investors?

Esports company Skillz Inc. (NYSE: SKLZ) went public on Thursday, becoming the first mobile esports platform to do so. If you were inspired by your love of gaming to invest, it looks like those hours you spent playing games on your phone may have paid off.

But is Skillz stock a good investment? Or is it merely part of the recent special purpose acquisition company (SPAC) fad? In this article, we’ll take a look at the company behind the IPO and see if we can get clear on what to make of Skillz stock.

A young man playing mobile games on his iphone as gaming platform Skillz Inc. IPOs its stock/

What Is Skillz Inc.?

Simply put, Skillz Inc. is a leading mobile gaming platform. In the words of founder and CEO Andrew Paradise…

We built Skillz on the founding belief that esports are for everyone, and have made significant progress toward our vision of enabling everyone to share in the future of competition. We stand at the intersection 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 have led us to this incredible moment on our journey to build the competition layer of the internet.

The Skillz platform allows developers to build franchises through the use of social competition in games. This can lead to the creation of gaming franchises valued at many millions of dollars.

Skillz Inc. is at the intersection of both gaming and esports. Millions of mobile players worldwide use its platform for gaming. And each month, Skillz pays out millions to tournament winners.

Skillz currently has about 2.6 million active users devoted to its esports and gaming platform. The company went public after merging with SPAC Flying Eagle Acquisition Corp.

On its website, Skillz. Inc. hails itself as “esports for everyone.” Some of its most popular games include…

  • Solitaire Cube
  • Blackout Bingo
  • Pool Payday
  • Bubble Shooter Arena
  • Block Blitz.

Skillz Inc. generates revenue through competition entry fees, brand sponsorships and in-game ads. The company is based in San Francisco and has received a number of accolades. It has been recognized as one of Fast Company‘s Most Innovative Companies and one of CNBC’s Disruptor 50. 

Skillz and the Mobile Gaming Industry

Skillz stock enters a mobile gaming industry that is currently valued at $63 billion worldwide. Experts expect this industry to grow to $100 billion by 2023.

It was every boy’s seemingly impossible dream to make money playing video games back when I was a kid. But mobile gaming and esports are now clearly huge businesses for investors.

Some of us may have thought that mobile games like Candy Crush Saga and Pokémon Go were mere passing fads, but it’s becoming increasingly clear that mobile games are bigger than ever.

Like betting on sports, betting on video gaming and esports combines the rush of the video games themselves with gambling. Could the stakes be any higher? Maybe not for players, and certainly not for investors.

Should You Invest in Skillz Stock?

By this time, you’re likely wondering if you should invest in Skillz stock. Well, that depends entirely on the outlook for the company and the esports and mobile gaming industries, and on your appetite for risk.

Currently, Skillz Inc. is trading at around $23 after opening at around $17.89. So a bit of value has been gained by IPO investors.

But given how hot esports and mobile gaming are likely to remain – as well as Skillz’s position within the industry – there’s good reason to think that the stock could continue to rise over time.

And if you’re interested in learning about stocks we may like even better than Skillz, check in with Bryan Bottarelli and Karim Rahemtulla in their free e-letter Trade of the Day.

In Trade of the Day, you will find daily insight into the hottest stocks straight from the Head Trade Tactician and the Head Fundamental Tactician of Monument Traders Alliance and its blockbuster trading community, The War Room. And be sure to subscribe to Trade of the Day right now!


About

Brian M. Reiser has a Bachelor of Science degree in Management with a concentration in finance from the School of Management at Binghamton University.

He also holds a B.A. in philosophy from Columbia University and an M.A. in philosophy from the University of South Florida.

His primary interests at Investment U include personal finance, debt, tech stocks and more.

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