Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its leaders.
In this report, we are going to highlight some insider buying at Skillz Inc (SKLZ:US). Skillz operates an e-sports platform. Leveraging its patented technology, the company hosts billions of casual e-sports tournaments for millions of mobile players worldwide and distributes millions in prizes each month. It is listed on the New York Stock Exchange and currently has a market capitalization of $5.1 billion.
Skillz Inc: Insider Buying
Our data shows that between November 8-9, three insiders at Skillz made large stock purchases. Those who bought shares were:
- CEO Andrew Paradise (432,105 shares @ $11.54 per share)
- Chief Revenue Officer Casey Chafkin (86,500 shares @ $11.63 per share)
- Board member Harry Sloan (80,000 shares @ $12.48 per share)
Combined, these three insiders spent around $7 million on Skillz stock.
This insider activity is worth highlighting for several reasons.
Firstly, these are the first buys from insiders since the company went public last year. Before these trades, insiders had only sold stock.
Secondly, the insiders have spent a substantial amount of money on stock. The trade from CEO Andrew Paradise, in particular, is very large.
Third, all three of these insiders are top-level insiders. Both Mr. Paradise and Mr. Chafkin are co-founders of Skillz. Meanwhile, Mr. Sloan was the founding investor, CEO, and Chairman of Flying Eagle Acquisition Corp, which merged with Skillz last year through a SPAC deal. It’s fair to assume that these three individuals know the company very well and have deep insight into the company’s performance.
Share Price Recovery
Skillz stock has underperformed in 2021 after the company was hit by a short-selling attack from Wolfpack Research earlier in the year. In October, the stock fell as low as $8, a long way below the 2021 high of $45 seen in February.
However recently, the stock has shown signs of a recovery and risen back up above $12. This rise has come on the back of the company’s third-quarter results, which showed year-on-year revenue growth of 70% and year-on-year gross profit growth of 66%. That represented the company’s 23rd consecutive quarter of revenue growth.
In the Q3 results, Skillz affirmed its full-year 2021 revenue guidance of $389 million. The company also noted that it had just hired seasoned gaming executive Vatsal Bhardwaj as Chief Product Officer. Bhardwaj previously served as General Manager and Director of Game Tech for Amazon Web Services, as well as Head of Product for several groups at Facebook.
In light of the Q3 results, we see the insider buying here as a bullish indicator. The stock is not without risk – short interest here is still very high. However, the large buys from the top-level insiders indicate that they expect the stock to rise from here.