What happened
Shares of Skillz (SKLZ +1.24%) are down 15.5% from their Friday close last week, according to data from S&P Global Market Intelligence, after investing guru Cathie Wood sold off a huge tranche of shares from her Ark Invest funds.
The money manager had been a hot property for several years, but her performance cooled off considerably last year. Yet investors still closely watch her daily stock picks to get a sense of her thinking on which way the market might be heading.
The news she sold off over 11 million shares of the mobile esports platform caused Skillz stock to dive Tuesday and it's continued falling since.
Image source: Skillz.
So what
Wood has been a seller of Skillz stock since the end of December, but on Monday dumped 3.6 million shares from the Ark Next Generation Internet exchange traded fund (ETF) and 7.5 million shares from her Ark Innovation ETF. She followed that up with another 4 million share dump the next day.
Yet this isn't the first time she has unloaded a large number of Skillz stock only to buy back in again later. Last August and September she dumped 4 million shares or so, only to buy back 4 million shares or so in October and November.
With around 250,000 shares left across all her portfolios, Wood has all but exited her position in the esports stock, but it's quite possible she could be back for more.
Now what
In reality, it's surprising Wood didn't sell out sooner considering she has bought numerous tranches of stock at much higher price points. Skillz peaked at over $46 a share a year ago during the meme stock trading frenzy, and it's been on a long, steady slog lower ever since. It closed on Thursday at just $3.65 per share, a loss of 92% of its value.
Skillz still has potential. It's a game-neutral platform where players compete against each other for cash prizes. Both it and the game developers also get to split a portion of those prizes.
What the markets want to see is whether it can accelerate and sustain its top-line growth, which it has had difficulty demonstrating thus far. It grew third-quarter revenue 70% to $102 million, but that wasn't enough for what is supposed to be a fast-growing play.
Skillz just announced last month it is expanding into the Indian market, which could be lucrative, but after buying on faith the esports platform would enjoy rapid growth, investors seem to be in a show-me phase. Wood apparently just got tired of waiting.
