What happened
Skillz (SKLZ -1.63%) shareholders can't catch a break these days. Shares of the mobile gaming platform plunged this morning on no company-specific news. Instead, it appears investors are growing increasingly concerned that the Federal Reserve will continue to increase interest rates at the expense of the U.S. economy.
As a result, Skillz shares are down by 8.4% as of 11:00 a.m. ET.
So what
Investors are looking ahead to the next few days, as the Consumer Price Index report will come out on Thursday, and retail sales data for September will be released on Friday. Investors aren't optimistic about the state of the economy, and Skillz shareholders are worried that the data will show a weakening economy, which could put pressure on the company's gaming business.
Image source: Getty Images.
Skillz's revenue fell 18% to $73 million in the second quarter (which ended on June 30), and the company remains unprofitable.
Investors are concerned that the Federal Reserve will continue to fight inflation with aggressive interest rate hikes and that the Fed's moves could end up spurring a significant economic slowdown.
In addition to economic fears, Skillz investors may also be reacting to comments made by Barclays analyst Mario Lu about another gaming platform, Roblox.
Lu said that Roblox benefited from a rise in gaming because of COVID-related lockdowns and social distancing but that it has reached high user penetration rates, "suggesting both user and bookings growth may be challenged moving forward."
Skillz shareholders may be considering Lu's comments and anticipating that the company will experience similar hurdles.
Now what
Investors will get a better picture of how Skillz is doing financially when the company reports its third-quarter results, which should be released around Nov. 2.
But with investors already worried about a significant economic slowdown, it's likely that this mobile gaming platform could experience some more share price pain in the near term.
