Why Has Skillz stock dropped?

Key Points. Fears of a recession are hitting the stocks of companies that rely on digital advertising. The mobile gaming segment has taken the worst hits. Skillz is suffering as both user engagement and its numbers of paying players are declining.

fool.com - Why Skillz Is Falling Hard Yet Again | The Motley Fool

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What happened

It's going from bad to worse at Skillz (SKLZ 3.34%). The mobile gaming platform's stock tumbled Friday morning, and was down by 10.1% as of 12:10 p.m. ET. While there was no company-specific news to explain the drop, the Dow Jones Industrial Average and S&P 500 have resumed their own declines, and were off by 1.1% and 1.4%, respectively, at that point in the session. As fears of a hard economic landing grow, the prospects for a big pullback in digital advertising increase, making it unlikely that Skillz will reverse its downward trajectory anytime soon.

So what

Skillz is in a bind. Its revenues are falling, losses remain substantial though slightly narrower, engagement is declining, the number of paying monthly active users is falling, and management has reduced its full-year guidance. New product development has stalled, too. The company placed a lot of hope on its $162 million acquisition of global demand-side advertising platform Aarki last year to help drive significant efficiencies in user-acquisition costs, but the integration of the technology-led marketing platform has only increased its costs so far. If there is a dramatic scaling back in demand for digital advertising, there might be little Aarki can do to stop the hemorrhaging currently underway at Skillz.

Now what

Online gaming got a huge boost during the lockdown phase of the COVID-19 pandemic, but a reopened economy has upset the growth plans of many businesses. With people spending more leisure time enjoying out-of-home entertainment again, and with more workers returning to offices, they have less time available for gaming. NPD Group says overall spending on gaming tumbled 13% year over year in the second quarter, and it was mobile gaming that led the way down: Spending in that category declined by 12%. While spending on mobile gaming is still higher than when it was before the pandemic, that's little consolation to Skillz shareholders. The esports stock now trades at just $1.11 per share -- a 90% loss of value from the price where it began trading following its SPAC merger in December 2020.

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What does +650 mean for odds?

athlonsports.com - What does ""plus"" and ""minus"" mean in sports betting? - AthlonSports.com

What does "plus" and "minus" mean in sports betting?

What does plus and minus mean in sports betting?

What does "plus" and "minus" mean as a sports betting term?

Odds expressed in terms of money, with $100 being the standard. If the odds are minus (–), then that amount of money must be wagered to win $100. (e.g. –150 means you must bet $150 to win $100.) If the odds are plus (+), that amount of money would be earned on a successful $100 wager. (e.g. +150 means you make $150 on a $100 wager.) Money line is also sometimes referred to as “American Odds.” The standard (and often implied) number is –110, meaning a successful bet of $110 would net $100 profit. This is the “juice” or “vigorish” (aka “vig”) for the house or sportsbook. Assuming equal bets on both sides, the house has a built-in 10 percent cut of the action, regardless of the outcome of a particular sporting event. This juice is a way to discourage gamblers from wagering on a heavy favorite. If the Golden State Warriors are listed at –500 to win the NBA championship, a successful $500 wager would only net $100. On the flip side, the plus-minus juice can also encourage gamblers to wager on a longshot. If the Los Angeles Lakers are a +500 to win the NBA championship, a successful $100 bet would net $500.

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