Shares of Skillz (SKLZ 2.38%) stock, which had been pummeled in the tech stock sell-off over the past few weeks, is swinging higher in afternoon trading, up 15.4% as of 12:25 p.m. EDT. And you can probably thank Cathie Woods for that.
The famed tech investor, who had been an aggressive buyer of Skillz stock last month and in early May, as well, appears to have been taking advantage of the sell-off to scoop up even more cheap shares of the San Francisco-based mobile-games platform this week.
According to the ARK funds website, which gives rolling updates of Ms. Woods' buys and sells, over the past two days, the ARK Innovation Index (ARKK 1.46%) bought more than 1.4 million shares of Skillz after playing possum for five days.
Investors seem to be taking that as their cue to follow the leader and are buying Skillz shares in droves.
Is that the right call? With Skillz growing revenue by nearly twice over the past year and nearly five times over the past two years, it's understandable that investors might think Ms. Woods is onto something with her aggressive buying of Skillz stock. That being said, a word of caution to value investors.
Skillz stock is not making money. In fact, its losses are growing even faster than its revenues (up nearly six times in two years). The company is also burning through cash like mad -- $97.6 million in negative free cash flow racked up over the past 12 months.
Most analysts who follow the stock don't expect Skillz to book its first GAAP profit before 2025, at the earliest. While it's possible that they're all wrong and Cathie Woods is right, that's far from certain at this point.