Skillz Spikes 21% After Cathie Wood Adds The Former SPAC To ETF

One of the most popular ETF managers added a stake in a former SPAC, causing the share price to jump after hours Monday and during Tuesday’s trading session..

What Happened: The Ark Next Generation Internet ETF (NYSE: ARKW) purchased 215,897 shares of Skillz Inc (NYSE: SKLZ).

The stake in Skillz is the smallest in the ETF, representing around $3.9 million and less than 0.07% of the fund’s assets.

Why It’s Important: The Ark Next Generation Internet ETF was up over 140% in 2020. While the initial position is small, Wood has a tendency to accumulate positions in small increments.

This is the third SPAC added to the ARK funds recently as Opendoor Technologies Inc (NASDAQ: OPEN) and Longview Acquisition Corp (NYSE: LGVW) are also now in Ark ETFs.

Prior to the SPAC merger, shares of Skillz were added to both the Roundhill Esports & Digital Gaming ETF (NYSE: NERD) and Roundhill Sports Betting & iGaming ETF (NYSE: BETZ).

“Skillz has patented technology to help game developers match users in a new betting platform similar to daily fantasy sports,” Roundhill CEO Will Hershey told Benzinga.

Skillz is creating a second layer of monetization for game creators Hershey added. Hershey said Skillz could be an acquisition target down the road thanks to a patent they own.

Related Link: DraftKings, Skillz SPAC Team Launch $1.5 Billion Spinning Eagle: What Investors Should Know

Benzinga’s Take: Wood has been one of the biggest names for investors to follow with trades. The active fund manager has seen strong interest thanks to her triple-digit gains across several ETFs in 2020.

Many new positions added to Ark Funds see strong spikes in the after-hours market. Despite the spike, investors could benefit from following Wood’s SPAC picks.

Wood started added shares of Opendoor when it was IPOB back on Oct. 2, 2020. Shares were $18.25 the next day and are trading over $29 now. Wood started adding shares of Longview on Nov. 23. Shares spiked into the $16 level the day after the add from $13.60. Shares of Longview trade above the spike price at $18.71.

The inclusion of Skillz by these three ETFs could make the company a good pick for its position in the growing esports and sports betting markets.

Price Action: Shares of Skillz closed up 21% to $22.08 on Tuesday.