Glu Mobile (Nasdaq: GLUU) Spikes; Is The Company A Takeover Target?

Tallahassee, FL 3/28/12 (StreetBeat) -- Glu Mobile (Nasdaq: GLUU) shares are trading sharply higher Wednesday morning on what would appear to be speculation that the mobile gaming company could be a takeover target.

Last Friday, the stock spiked 21% after Needham analyst Sean McGowan picked up coverage of the mobile gaming company with a Strong Buy rating, asserting that the stock, then trading at $4, could double to $8. ““We believe GLUU’s smart phone growth has been hidden in recent years by the decline of its feature phone revenue, but its new model is based on owned-IP, which is far more profitable,” he wrote. “As the global installed base of smart phones and tablets grows and GLUU’s low-margin feature phone revenues burn off, we expect significant gains in profitability.”

The stock sagged Monday and Tuesday as investors took some profits. But GLUU is revving up again this morning, perhaps in part due to a Seeking Alpha piece posted yesterday by an investor named Chris Katje which asserts that the company is “now the biggest acquisition target in the gaming market.”

Meanwhile, Northland Capital Markets analyst Darren Aftahi this morning repeated his Outperform rating and $7 target on the stock, which he notes is trading at a huge valuation discount to Zynga by most measures. He also notes that the company now has 9 of the top 100 games for the iPad market in China – and that China has now eclipsed the U.S. as the world’s largest market for free apps for the iPad.

GLUU is up 37 cents, or 8.3%, to $4.84.

Note that with a $310 million market cap, Glu would be a bite-sized acquisition for some potential buyers.

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Glu Mobile (GLUU) Stock Chart Analysis

The Glu Mobile stock chart is making an inverted head and shoulders pattern. Resistance from the neckline coordinates with the 200 day simple moving average, Technical traders will be watching for the break of the resistance as the upside is significant should the pattern continue to play itself out.

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PR and Investment Report Not Working for GLUU Stock

Dallas, TX 5/5/2011 (PennyPayDay) -- In a press release today, MicroStockProfit.com announced an investment report featuring Glu Mobile Inc. (Nasdaq:GLUU). I do not think this press release and investment report had the intended effect because, as I write, shares of GLUU are down 3 percent at $3.93 per share on light volume of 174,000 shares compared to its average daily volume of more than 2 million shares.

Glu Mobile (GLUU) is a global publisher of 3D Social Mobile games for smartphone and tablet devices. Its unique technology platform enables its titles to be accessible to a broad audience of consumers all over the world - supporting iOS, Android, Palm, Windows Phone 7 devices and beyond. The Company is focused on bringing the best in social, freemium, cross-platform mobile gaming experiences to the mass market, and on creating compelling original IP. It has partnership with leading entertainment brands including Activision, Atari, Caesar's and Fox.

In the report, the analyst notes:

"In the first quarter, the Company lost $3.2 million, or $(0.06) a share, narrowing the year-ago quarter loss of $3.7 million, or $(0.12). Excluding items, net loss was $(0.02) a share, compared to an ex-item net loss of $(0.03) a share in the year-ago period. Analysts polled by Thomson Reuters expected a loss of $(0.07) a share."

"During the quarter, GLUU saw total revenue of $16.4 million, down 5% from $17.3 million in the same period last year, but still ahead of analyst expectations of $14.1 million."

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Top Mobile Acquisition Targets

2010 has been termed the “Year of Mobile”. This is the year where the proliferation and adoption of the smart phone has given rise to staggering industry growth projections. A year where global mobile advertising revenues alone will exceed $3.5 billion dollars.

Right in front of our eyes, a technological revolution is taking place which will not only transform forever the way in which we communicate with others, but how major companies and their brands communicate with us. In fact, the rate at which new technology is emerging in the mobile phone field has even overtaken that of personal computers.

Mobile phones are the new "final frontier". Mobile phone growth has exceeded even the most optimistic penetration predictions. In the United States alone, 84% of the population owns a mobile phone. Worldwide, mobile phone access is growing by about 30% a year. The mobile phone is a lot more personal than, say, a desktop computer or a laptop. A phone owner will go everywhere with his/her phone. This provides a unique advertising opportunity for businesses. Ads can be targeted with an unprecedented level of accuracy and users who view the ads are more likely to interact with them than on traditional media. Furthermore, ads can be location specific or tailored based on other criteria such as behavioral, geographic or demographic criteria, allowing for the targeting of one, the holy grail of marketing.

When I look for next year's big potential stock winners, there’s no doubt what space will most likely provide them. The following companies each represent a specific mobile area that I think will see tremendous growth not only over the next year but over the next few years. As in most high growth technology evolutions, we will see periods of consolidation where larger players aggressively seek out smaller mobile emerging leaders focused on niche markets and verticals that would complement their existing mobile strategy. As is often the case, it’s cheaper to acquire a business than for a company to build it from scratch.

What makes these targets valuable is that they all have deep value that can be unlocked inside the larger scale of the acquirer. With many large players focused squarely on mobile, and hoards of cash in their bank accounts, I expect mobile acquisitions to accelerate in the next twelve months.

Here are two of my top smaller mobile companies who possess unique qualities that would make them highly attractive takeover candidates in the new year:

Augme Technologies (OTC:AUGT) ($2.61)

Augme Technologies has the only innovative patented end to end mobile marketing platform and solution that is instantly formatted for use on all devices and all operating systems. Augme’s patented technology is foundational to key targeted Internet functions, such as advertising, broadcasting and content delivery. Recently, two additional new patents have been issued based on this original technology that cover Internet and Mobile Web sites to be delivered with customized content that is tailored to any end-user's network-enabled device and enables content targeting by publishers of Internet and mobile web destinations. In recent quarters revenues have been doubling quarter over quarter and they recently said they expect revenues to be more than $10M for the next twelve months and they are already working with a host of household name Fortune 100, 200 and 500 companies like Johnson and Johnson, Graphic Packaging, HBO, Lionsgate, News Corporation and others. The company presents a best of both world scenario with an attractive IP portfolio and a rapidly growing mobile business; either would be desirable to host of larger players.

Glu Mobile (NASDAQ:GLUU) ($2.23)

Glu Mobile Inc. is a leading global publisher of social games for smartphone and tablet devices. They just released what they call their first social mobile game. This new business model is focusing on microtransactions within games and in-game advertising. Revenues for this sector grew 98% quarter over quarter. With the explosion of smart phones and tablet devices coming by year end I would expect this trend to accelerate. The following titles are released or will be released before Christmas. Keep in mind they have very strong partnerships with both Apple and Google. They will continue to release 5 to 6 titles per quarter.

iPhone Gamer Glu Mobile (NASDAQ:GLUU) Hits 52-week High

Glu Mobile (NASDAQ:GLUU) hit a new 52-week high today of $2.75 per share on heavy volume after announcing significant traction for its first two social mobile games. In mid-day trading, shares of Glu Mobile were up 15 percent at $2.57 per share on volume of nearly 1.3 million shares compared to its average daily volume of only 128,000 shares. Glu Mobile has a market cap of $79 million and a 52-week range between $0.85 and $2.75 per share.

Glu Mobile, a leading global publisher of social games for smartphone and tablet devices, today announced strong early momentum for its first social mobile games: Gun Bros and Toyshop Adventures. In a matter of weeks, Gun Bros and Toyshop Adventures have each generated more than 1M downloads from the App Store.

“We are thrilled with the reception to our first social mobile games. We expect to release five to six new social mobile titles every quarter on smartphones and tablets to satisfy mobile gamers appetite for quality, innovative gameplay and social mobile games,” stated Niccolo De Masi, Chief Executive Officer, Glu.

Highlighting Q4 results to date, Gun Bros is currently averaging more than 100,000 daily active users while Toyshop Adventures is currently averaging more than 70,000 daily active users. The success of these titles comes only one week after Glu announced its third quarter of 2010 financial results which showed strong growth and momentum in building its installed user base and increasing its smartphone revenues. Glu reported in its third quarter of 2010 earnings call that its monthly active users grew to 4.2M in September 2010. The company cumulatively achieved more than 31.9M installs on iOS devices alone at the end of September, with micro-transactions and in-game advertising revenues growing 98% quarter-over-quarter.

“Our deep partnerships with Apple and Google, strong internal studios, and cross-platform capabilities position Glu well to accelerate our early momentum,” said De Masi.

About the Glu titles to hit over 1M downloads each:

• Gun Bros - reinventing the typical top-down shooter in a free-to-play, comedic, action-packed game that is full of non-stop, pure adrenaline. Gun Bros features simple gameplay mechanics, a large variety of over-the-top-guns, armor and power-ups, and the social option of easily adding friends into your game.
• Toyshop Adventures - take control of the lovable toys while traveling through and exploring the miniature toyshop world in this free-to-play, highly-imaginative, original game inspired by classic platform and adventure games.

Glu Mobile is a leading global publisher of social games for smartphone and tablet devices. Glu's unique technology platform enables its titles to be accessible to a broad audience of consumers all over the world - supporting iOS, Android, Palm, Windows Phone 7 devices and beyond. Glu is focused on bringing the best in social, freemium, cross-platform mobile gaming experiences to the mass market. Founded in 2001, Glu is headquartered in the San Francisco Bay Area and has major offices in Brazil, China, Russia and the UK. Glu is focused on creating compelling original IP and also partners with leading entertainment brands including Activision, Atari, Fox and Harrah's.

Consumers can find high-quality, fresh entertainment created exclusively for their mobile devices wherever they see the 'g' character logo or at www.glu.com.