Leading corporate digital learning company Skillsoft (SKIL) has been trying to drive its growth through strategic acquisition and debt refinancing. However, since it is burning cash despite a substantial debt load and unstable financials, is it worth betting on the stock now? Let’s discuss.Digital learning services operator Skillsoft Corp. (SKIL) in Nashua, N.H., provides enterprise learning solutions and a library of authorized technology and developer curricula to improve learner engagement and retention. The company went public on June 11 via a SPAC acquisition. However, it filed for bankruptcy last year after the COVID-19 pandemic severely impacted demand for its services.
Shares of SKIL are down 9.2% over the past six months and 11.5% over the past year. The stock is currently trading 20.5% below its 52-week high of $11.75. Also, SKIL is trading lower than its 50-day and 200-day moving averages of $9.59 and $10, respectively, which indicates a downtrend.
Although its recent strategic acquisition of a digital coaching platform could drive its growth in the long term, the company’s heavy reliance on debt refinancing could lead to insufficient cash flow given its fragile financials. So, here is what we think could influence SKIL’s performance in the near term: