Flying Eagle Acquisition Corp [NYSE: FEAC] is a top perfumer this afternoon and is up by 19% at the time of writing. The stock’s upside momentum is driven by news that the company was taking mobile gaming platform Skillz, public. In a statement, Skillz has said that it was merging with Flying Eagle Acquisition Corp, a special purpose vehicle for mergers and acquisitions. Under the deal, Skillz Inc will go public at a valuation of $3.5 billion, representing 6.3 times the estimated value of the company’s 2022 revenues. The move to take Skillz public is a big deal for a number of reasons.
First, Skillz is the first mobile Esports Company to go public. This will see it draw interest from investors looking for a share of the first growing mobile gaming market. The business already has attributes that make it a high potential stock. For starters, it already has investment commitments totalling to over $250 million. Some of the big investors that have committed themselves to the company include Wellington, Franklin Templeton, Fidelity and Neuberger Berman.
. On top of that, the company is operating in a high growth market. It is projected the company will have a compound annual growth rate of 57% from 2020 to 2022, and its revenues for 2022 are projected to hit $555 million. However, the most important factor to the deal is that the company is retaining the persons behind its success so far.
As part of the merger deal, the company will retain both its CEO Andrew Paradise who is also a founder, and Casey Chafkin who is the company’s CRO and founder. By retaining its top brains, the company is uniquely positioned to sustain the momentum that it started while still trading as a private company. For context on how good the team is, it has managed to grow the company to become one of the largest and most important players in the mobile gaming space.
Commenting on the merger deal, Flying Eagle CEO Harry E. Sloan stated that he had been active in the gaming industry for over 20 years and had seen it evolve to what is today. He added that he firmly believed Skillz was well-positioned to be the future of gaming. His views were echoed by Skillz CEO who stated that the company was in a good position to capture the worldwide esports market.
With such a high-value company under its fold, Flying Eagle is well-positioned to record stock value growth in the near-term.
About Flying Eagle Acquisition Corp
Flying Eagle Acquisition Corp effects mergers and asset acquisitions and corporate reorganization. It is based in Los Angeles, California.