Cathie Wood’s Portfolio: 5 Stocks Under $10

Page 1 of 5

In this article, we discuss 5 stocks under $10 in Cathie Wood’s portfolio. If you want to see some more stocks in this selection, go see Cathie Wood’s Portfolio: 10 Stocks Under $10.

5. Skillz Inc. (NYSE:SKLZ)

Number of Hedge Fund Holders: 18

Share Price as of April 15: $2.40

Skillz Inc. (NYSE:SKLZ) runs a mobile games platform that enables players to compete in tournaments with users worldwide. Its games are distributed via an app and third-party platforms. Cathie Wood’s ARK Investment Management added Skillz Inc. (NYSE:SKLZ) to its portfolio in the first quarter of 2021, and as of Q4, the fund owns over 24 million shares of the company, worth $179.2 million. 

Citi analyst Jason Bazinet on March 1 reiterated a Buy recommendation on Skillz Inc. (NYSE:SKLZ) but lowered the firm’s price target on the shares to $5 from $9 after the company’s Q4 results. The analyst, despite the Q4 earnings miss, still likes the shares since Skillz Inc. (NYSE:SKLZ) has a “unique platform and potential path to positive EBITDA.”

Among the hedge funds tracked by Insider Monkey, 18 funds were long Skillz Inc. (NYSE:SKLZ) at the end of the fourth quarter of 2021, with collective stakes amounting to $370.6 million. Leonard A. Potter’s Wildcat Capital Management is a significant position holder of the company, with 21.6 million shares worth approximately $161 million. 

Here is what Bireme Capital has to say about Skillz Inc. (NYSE:SKLZ) in its Q3 2021 investor letter:

“Another short position we initiated was in Skillz (SKLZ), a mobile game publisher with $230m in 2020 revenue, and $98m of 2020 EBITDA losses. When we shorted it, SKLZ had a ~$6b valuation; it is now down to $4.5b, and we believe it has much more room to fall.

SKLZ is a great example of investors getting hyped up over a quickly-growing company employing misleading industry jargon. In this case, the jargon is “eSports.” eSports is, in fact, a large and growing industry, and the term describes the business of competitive video games. Typically, this involves hosting tournaments, either live or online, where spectators can watch professional gamers compete at high levels. Prize pools are often in the millions. Ticket sales, sponsorships, and advertising revenue from such events totaled over $1b in 2020…” (Click here to see the full text)

Page 1 of 5