Daily Archives: September 8, 2021

Skillz (NYSE:SKLZ) stock appears to have climbed recently due to takeover speculation and a boost from Reddit traders.

Source: NYCStock / Shutterstock.com

But I believe that the takeover speculation is likely unwarranted, while SKLZ stock remains extremely overvalued.

A publication called CTFN suggested that a casino could look to buy Skillz because there has been consolidation between casinos and online gaming, Seeking Alpha reported.

Skillz, however, does not feature gambling or emphasize games that gamblers traditionally enjoy such as poker, craps, or blackjack. It does appear to have a blackjack game and a poker game, but they arent a big part of Skillzs offerings.

As Casino.org explained in an Aug. 2 article, The bulk of the games featured on Skillz arent traditional casino fare, such as blackjack, craps, or poker.

And its tournaments with cash prizes involve traditional videogames, rather than traditional gambling games.

Given these points, its obvious that most of Skillzs customer base are probably fans of traditional video games. Casinos and companies that feature traditional gambling games online (known as iGaming) are targeting different types of consumers.

Specifically, theyre seeking consumers who enjoy the traditional gambling games, whether online or in-person or both. Thats why DraftKings (NASDAQ:DKNG), in an effort to expand its iGaming offerings, bought Golden Nugget (NASDAQ:GNOG), which owns many casinos and an online gambling site. Thats why MGM (NYSE:MGM) launched a joint venture called BetMGM, which specializes in iGaming and sports gambling.

Skillz has very limited iGaming infrastructure, and it caters to fans of traditional videogames, not lovers of iGaming and sports betting. Therefore, it would make no sense for a company that specializes in iGaming, operating brick-and-mortar casinos, and/or sports betting to buy Skillz.

Skillz is changing hands for nearly 13 times analysts average 2021 top-line estimate for the company. Ive heard value investors say that stocks which are trading at ten-times revenue are too expensive.

I believe that, if a company is growing explosively, has a huge addressable market, is moving towards profitability, and has great disruptive potential, ten or even 20 times revenue could be a worthwhile price to pay for long-term, growth investors.

But as far as I can tell, Skillz does not have any of these attributes.

In Q2, its top line climbed 52% year-over-year. I think thats impressive growth, but I wouldnt call it explosive. As Ive pointed out in other columns, many video games now have online multiplayer options, giving Skillz plenty of competition, and there are signs that eSports, which appears to be the main area in which Skillz has a strong competitive advantage, is not a very large market. Finally, the companys EBITDA, excluding certain items, dropped $283 million YOY last quarter, falling to -$31.6 million.

There are concrete signs that the popularity of video games is waning as economies reopen. For example, Take-Two Interactive (NASDAQ:TTWO) recently provided a lower-than-expected Q2 bookings estimate, causing its stock to fall sharply.

And in July, video game sales rose just 10% YOY. I wouldnt call that impressive or explosive growth.

Finally, Ive predicted for a couple of months that meme stocks would weaken. Although some meme stocks have been making a bit of a comeback in recent weeks, many, if not, most of them are already down a great deal from their recent highs. For example, SKLZ stock itself has fallen to around $12, versus its July 28 high of around $14.70.

I continue to expect most meme stocks to weaken over the longer term.

The takeover speculation about Skillz is unrealistic, while the company does not have any of the characteristics that a good, highly valued growth stock should have. Whats more, its facing a number of important macro challenges.

In light of these points, I continue to recommend selling SKLZ stock.

On the date of publication, Larry Ramer held a long position in MGM stock.

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israels largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highlysuccessful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at@larryramer.

See the rest here:

The Valuation of Skillz Stock Remains Excessive - Investorplace.com

Once the limousine door closed, a dozen of Nate Bargatzes closest friends and family members began reciting their favorite jokes from the sold-out show hed just finished in Reno, Nevada. There was the one about never asking a fitness junkie for advice on losing weight, lest they warn you about eating too much fruit. (Lets get to that point, all right? Bargatze had said. I dont think Im at where Im at because I got into some pineapple last night.) And the one about his hometown of Old Hickory, Tennessee, being named after Andrew Jackson, and a reporter informing him that the seventh president had been a bad person. (You know, we didnt know him or anything, hed deadpanned.)

As we rode through Reno on a 100-degree July night, I asked Bargatze what moment from the show stood out to him. It was the bit, he said, about the woman at a comedy club in Grand Rapids, Michigan, whose siren of a laugh was so distracting that the staff had to ask her to keep silent for the rest of the show. The joke skewered her parents for not correcting this when she was young, then segued into Bargatzes lament about carrying his own bad habits into adulthood. It was one of the high-decibel points of the show, but thats not why Bargatze brought it up.

I just need to be super careful with anything that could be seen as making fun of someone, Bargatze said. Maybe she had a disability or something. In fact, as his joke tactfully made clear, she did not appear to have a disabilityjust an unbearable laugh. And yet he seemed nervous. Ive seen shows where comedians cracked about someone not clapping, then realized theyve only got one hand, or joked about someone wearing sunglasses inside, then realized theyre blind, he said. I never want to put myself in that situation. I never want to be mean.

Bargatze, 42, who spent years toiling in front of single-digit crowds, had just kicked off the biggest headlining tour of his career. He was on his way to board a chartered plane to Las Vegas for two more sold-out shows. Some of his dates were selling out 10 months in advance, and he and a team of Hollywood writers were in discussions with Netflix about an eponymous sitcom. Yet here he was, spending his post-launch limo ride worrying that he may have inadvertently offended someone who wasnt there with a story that was meant to highlight his own deficiencies.

The legends of stand-up, from Lenny Bruce to Richard Pryor to Dave Chappelle, were subversive, antagonistic, troublemaking. Bargatze is none of those things. He worries constantly about alienating his audience or hurting someones feelings. His act is slow, almost soothing, as he plods through nonthreatening tales of his own mediocrity. He comes across as a walking Xanax, helping audiences slow down and, as he says, shut off their brains for an hour.

From the January/February 2013 issue: Monty Python, the Beatles of comedy

If comedy is a proxy for the mood of American society, Bargatzes sudden popularity suggests that hes tapped into something powerful: the discontent with our discontent. He insists that stand-up can be a great unifier, bridging the divides that have emerged within families, among friends, between red states and blue states. People are worn out, he told me. It seems like every form of entertainment these days has to have a message, and its gotten old.

Bargatze broke out during Donald Trumps presidency with the first of two hour-long Netflix specials. A college dropout who insists hes too dumb to make informed decisions for himself, let alone lecture anyone else, he never talks about politics. He goes nowhere near race or identity issues. He maneuvers so gingerly around other subjectsreligion, gender roles, the fracturing of Americathat they feel untouched.

The comedian to whom Bargatze is most often compared is Jim Gaffigan, the churchgoing family man from Indiana whose punch lines revolve around parenting and food. But even Gaffigan picked a side in the summer of 2020, when he called Trump a fascist on Twitter and suggested that his voters were part of a hapless cult. Gaffigan was denounced in the Wall Street Journal opinion section and sworn off by countless fans across Red America.

When I mentioned this episode to Bargatze, he exhaled hard and gazed skyward, like a bystander asked to describe a car wreck. I dont have the stomach for that stuff, he said. I dont have it in me to make people uncomfortable.

From the September 2015 issue: Caitlin Flanagan on how comics have to censor their jokes on college campuses

Instead Bargatze takes his audiences on strange, circuitous journeys that rarely conclude with an obvious punch line. He tells stories about sleeping in a hotel room with the lights on because he couldnt find the switch, and being intimidated by his 9-year-old daughters homework, and accidentally ordering coffee with whipped cream instead of with cream.

Gaffigan told me that from the first time he saw Bargatze perform, he was impressed that Bargatze could be so unhurried, so inoffensiveand yet also rollickingly funny. Comedy is all about authenticity and point of view, he said. Nate is your buddy from a small town. Being so unaware, and discovering through his observations, thats what makes Nate funny. His jokes dont make a judgment.

Raised by strict Southern Baptist parents, Bargatze was the class clown who never got in trouble, the life of the party who never went to parties. But he was never academically inclined, either. After high school, he bounced from job to job. He worked construction. He sold cellphones at a Walmart kiosk. He delivered furniture. He put on drunk-driving simulations at high schools. Finally, he did some remedial coursework at a community college, then enrolled at Western Kentucky University. He promptly flunked every courseeven bowling, despite having once rolled a 266. He just didnt show up, his father, Stephen, told me.

When he came home, Bargatze told his parents that he wanted to pursue comedy. (They took the news well; his father made a living as a clown and a magician, a source of material for his sons future act.) At his first open-mic event, Bargatze squirmed watching his parents sit through hours of expletive-laden acts before he went on. I knew then and there I was going to be clean, Bargatze told me. I just couldnt imagine my parents coming to watch a show and Im up there being dirty.

He spent two years in Chicago without landing a single paid gig, then moved to New York, where he caught a break at the famed Boston Comedy Club. He was a barker, handing out flyers in Greenwich Village, compensated with free stage time at nights end. (He walked dogs and drove a FedEx truck during the day to pay the bills.) For years, Bargatze would take the stage after 1 a.m., when only four or five people were left in attendance. But he got to watch stars like Dave Chappelle and Louis C.K. hone their craft, and he studied up-and-comers such as Bill Burr and Patrice ONeal.

Bargatze also began drinking hard, and his act became edgier. He started swearing from the stage, and told stories about getting blackout drunk. He poked fun at overweight people, and introduced an eyebrow-raising bit about sex workers being murdered in New York City.

Bargatze told me he got very close to that edge of sabotaging his career because of alcoholism. He no longer drinks, and he hasnt cursed onstage in more than a decade. And the bit about sex workers? It became something of an inflection point. I had a girl message me on Twitter. She was a prostitute. And she was really, really hurt by it, Bargatze told me. And I just felt horrible. Like, heres this person whos really sad because of something I said. You know? I told myself I would never do that again.

Before every performance, in the dressing room backstage, Bargatze pulls out an index card and writes down his set list. The one- or two-word prompts spill down in columns from left to right, usually 30 to 40 in total. The habit reinforces his memorization while also offering a final chance to reshuffle the act.

On his last night in Las Vegasas his father warmed up the crowd with a magic actBargatze told me there would be some changes to the show. His joke about a scientific proposal to dim the sun, one hed giddily previewed just before the Reno show, was out. Instead, he was inserting new materialat the very top of the show, something his comedy hero, Jerry Seinfeld, calls a rookie mistakethat hed written hours earlier while bleeding money at a blackjack table. The gist was that Vegas dealers flipped cards too fast, so rather than trying to keep up, he would watch their facial expressions the way someone studies a flight attendants reactions on a bumpy flight: Am I going to be okay here?

The blackjack bit won roaring approval. Blackjack dealers do move too fast, and he does seem too dumb to do such speedy math. The sun-dimming joke had failed for the very reasons the blackjack joke succeeded. Bargatze was roasting the scientists floating the idea, rather than turning the joke inward, suggesting that its the kind of solution to climate change youd expect him to come up with.

What makes Bargatze so effective during these fraught times, Gaffigan told me, is his embrace of victimless comedy. But this isnt quite right. What Bargatze does is make himself the victim of his jokes, turning anecdotes into uncharitable assessments of his own intelligence.

The irony is that his comedy is really smart. His yarn about driving past a dead horse lying on the side of the road, which sent him racing down mental side streetsHow heavy is a dead horse? Would friends help move it? Which body part is easiest to lift?is so entertaining that it distracts from the jokes ultimate destination. The horse was alive, Bargatze discovered on the drive back. He just didnt know horses could lie down to sleep.

Burr, one of the most successful comics working today, told me that Bargatzes humor stems from his capacity to embody a certain type. Theres always the stereotype of the southern guy with the thick accent and theyre not smart. Its such a dumb stereotype, Burr said. But Nate knew how to make that work for him.

Burr recalled how he and Bargatze bonded years ago over their shared disdain for New Yorks cultural self-importance: Some of these badasses from Brooklyn used to make fun of the South, and Nate would take them on and destroy them. It was just amazing to watch.

That might sound out of character for the understated comedian. But if theres one subject that gets Bargatze worked up, its coastal condescension. In the time I spent with him, he kept flashing irritation with how places like his hometown are portrayed in popular culture. I do hate the way people in New York and L.A. talk about the Southwere all a bunch of rednecks running around screaming the Nword, he said.

It was a hint that Bargatze does have strong opinions about divisive subjectsopinions that would undermine his unifying image and, very possibly, damage his commercial appeal if he expressed them onstage. Reading my mind, he added: Im trying to ride the line here. Because I want to be able to sell out a theater in San Francisco one week and Mobile, Alabama, the next week. You know?

After his show, as we looked out across the shimmering Las Vegas skyline, I asked Bargatze whether he worried that his onstage persona as an aw-shucks southerner might contribute to a caricature of the people and places he loves. He seemed puzzled by the question. Look, I am dumb, he said. Thats not the South being dumb; thats just me.

Maybe he is dumb. Or maybe, I suggested, hes smart enough to see how coming across as simpleminded could work to his advantage.

Bargatze allowed a knowing smirk. I just want to be funny, he said. That ought to be enough.

This article appears in the October 2021 print edition with the headline The Xanax of Stand-Up.

Read more from the original source:

Nate Bargatze Is the Nicest Man in Stand-Up - The Atlantic