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Why Skillz Stock Was Up Today

By Jon Quast - Jun 24, 2021 at 3:12PM

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There wasn't any news to explain the stock's action today, leaving its high short interest as one of the most reasonable explanations for the move.

What happened

Shares of mobile-gaming platform Skillz (SKLZ -1.05%) made a big move today -- up 6% as of 1:20 p.m. EDT. This continues a strong run for the stock over the past month, with the stock now up 35% over the past 30 days. But strangely enough, there hasn't been much news of substance for shareholders, which appears to be the case again today.

So what

It seems that some investors see a correlation to Skillz's gains today with new legislation in Canada. The Senate of Canada approved Bill C-218 on Tuesday, allowing Canadian citizens to bet on sports games like hockey and football (but not horse racing). However, this doesn't appear to be fundamental news for Skillz shareholders. Skillz's platform can already be accessed in Canada. Besides, it doesn't offer gambling for sports games anyways. After all, betting on the outcome of a hockey game is more a game of luck than skill.

A person plays a mobile game while lying on a bed.

Image source: Getty Images.

Skillz's platform also has some newer titles that are getting good reviews on Apple's App Store. They include Match Two Rivals -- Pair Puzzle and Hyperspace Word Race, which both score five out of five points. But these reviews represent very small sample sizes. Plus, these games didn't launch today, so there's no reason to believe they're moving the stock.

Now what

Finally, some investors point to the high amount of short interest in Skillz stock as part of what's going on. According to Yahoo Finance, about 24% of the float for Skillz stock is sold short. High short interest like this is still claiming the attention of a crowd of traders eager to spark some kind of short squeeze as a result of their collective buying pressure. 

If that's what's driving Skillz stock higher today, then there's really nothing long-term investors need to do. Stocks go up and down in the short term -- sometimes quite sharply -- and this is something we accept as part of the game. We try not to watch the daily gyrations, instead focusing on the things that will make or break an investing thesis over the course of years.

With Skillz, there's a lot to like long term. But there wasn't anything that changed materially for better or worse today for those long-term prospects.

Jon Quast owns shares of Skillz Inc. The Motley Fool owns shares of and recommends Skillz Inc. The Motley Fool has a disclosure policy.

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