1) $SKLZ - I just bought $300,000 of this stock.

This thread is my due diligence on $SKLZ and will cover in detail why I am very Bullish on the stock and why I think it has the potential to be a 10X multi-bagger.

...(continued in thread)
2) What's bigger than the movie and music industry? Mobile gaming... and its growing like crazy.

eSports games now pull in larger stadium crowds than many top professional sports.

If you've ever watched a sporting event where you had a bet on it, that ...
3) ...experience was magnified, right? The same will happen with gaming once players can place bets on their skill vs. another player, even if the bets are small.

That time has come, and that company is SKILLZ, traded as $SKLZ.
4) Skillz is opening up a platform where you can find skill-based games that allow people to compete against one another for money, free of cheating, and do this in a way that's never existed before.

This is truly unique and disruptive.
5) SKillz doesn't make games - they are the platform game devs use to allow users to place real money bets on skill. This is a very important point. Own the platform, and you control everything.

Think of them as the Shopify of gaming. But with the power of the IOS appstore.
6)SKILLZ shares revenues with game developers, the majority of it going to the developers. Makes them happy.

Players can play for free, but to bet on your skill, then both players pay an entry fee.
7) Skillz takes 14% of both player's entry fees. The 14% take rate percentage is low IMO and I would expect this to increase in the future, especially when developers are used to paying upwards of 30% in app stores.
8) SKILLZ has 20,000 game devs using their platform but there is an est 10 million game devs in the world, so the 'creation pool' is barely tapped. Devs can make serious money. In 2018 there were 15 games with Annualized GMV > $1 Million. In 2020...
9) ...once reports are released, it's estimated to be over 34, more than doubling.

And they are opening up additional revenue opportunities for developers, which will help drive tons of new devs and games into the ecosystem.
10) SKILLZ does the heavy lifting for the devs via their SDK - the data interface, monetization and registration services, player matching, fraud protections, fair play monitoring, billing, settlement and paymnt dispute services -- everything! Devs can focus on making cool games.
11) Since these are games of skill, they aren't technically considered gambling, and thus legal in 41 states, and most of the world.

However, we are seeing US States open up gambling, and this is going to spur SKILLZ to new heights when they can legally introduce games that...
12) ...fall under that umbrella (ex: poker, black jack, and all card games).

I don't believe any of their future revenue projections even include legalized gambling yet.
13) More time per day is played on SKLZ than people spend on FB, Tiktok, or Youtube.

50% more screen time per day than Youtube. This proves how sticky their platform is.
14) The more games released on Skillz, the more sticky it becomes. A person who signed up to play chess on SKILLZ may find another strategy game that pulls them in as well, where they pay new entry fees, of which 14% goes to SKILLZ.
15) What about competitors? SKILLZ has over 50 approved/pending patents on its software, creating a large moat.

Draftkings $DKNG could be a potential competitor, but they focus on sports betting, not the user playing esports. Very different worlds right now. However...
16) ...DraftKings has rolled out an online casino that is legal in 3 states right now, but they'd also benefit from gambling opening up across the USA.

I've hedged my bet here (pun intended) by also investing in $DKNG.
17) Most mobile games you find on the app store rely on WHALES, aka Super Spenders, to generate the majority of their income. Normal users are mostly left out. And the ability for whales to out-purchase a regular user and have massive advantages in a game is one of ...
18) ... the issues that plague so many apps. SKILLZ solves this. Everybody pays entry fees & play based on skill, not on the size of their wallet to purchase upgrades. This levels the playing field, everybody buys in, and devs don't have to rely on just a few big spenders.
19) Traction:

There are 5 million daily tournaments, with over $100M paid out in prizes per month.

GLUU does has 5X the MAUs (SKILLZ has 2.6 million active users), but SKILLZ Monetizes 3X+ better than GLUU per user. $1.89 Avg Rev Per User (ARPU) for GLUU vs $6.30 for SKILLZ.
20) GLUU is another potential competitors, but their model hasn't focused around betting on skill based games.

And even if they wanted to, there's a mountain of patents they'd have to navigate through to even compete.
21) Management believes they can monetize via this fashion at 5X higher multiple than using in game advertising or in-app-purchases, which is how the rest of the industry monetizes.
22) One thing to keep in mind is that 90% of players on SKILLZ play for free. While that may seem bad, I don't think so.

That's a lot of people to help drive even more players to the platform. Remember, this is a player vs. player platform. People want to recruit ...
23) ...their friends. And to sweeten the pot, SKILLZ is looking to capitalize on ad revenue from these users in the future.

So at worse, they monetize non-paying users like the rest of the market does.

The company has a 95% gross margin that is mainly from entry fees.
24) Management says their users on average are 4 to 5 times more likely to spend money in their app than users do in other mobile games.
25) Revenue growth looks nice -- 2018 revenue $50.7M, and 2019 at $119M, more than doubling. And while 2020 revenues are not announced, it's expected it will be close to $200M. This is wonderful growth.
26) You can find points 26 through 42 here: https://twitter.com/BullishAngel/status/1347593508698390529?s=20
You can follow @BullishAngel.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled:

By continuing to use the site, you are consenting to the use of cookies as explained in our Cookie Policy to improve your experience.