Why Skillz Stock Fell Sharply Today
Shares of mobile-gaming platform Skillz (NYSE: SKLZ) fell sharply on Wednesday after the company announced a secondary offering of its stock. While this is common for high-growth companies like Skillz, you could make the argument that the timing of this event isn't great, contributing to the market's negative reaction. As of 12:30 p.m. EDT today, the stock was down 13%.
There are two groups of sellers with this offering: Skillz and stakeholders that aren't Skillz. For the stakeholders, they're selling 15 million shares for sure, but there could be almost 20 million shares if the underwriters exercise their options. These shares already exist, so this is nondilutive. On one hand, that's good. On the other hand, Skillz doesn't get any cash for this.
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Source Fool.com
