Glu Mobile Has Surged Almost 50% And Still Has Room To Run

| About: Glu Mobile (GLUU)


Since announcing a secondary offering, Glu Mobile has climbed almost 50% in the past 30 days.

The company has been aggressively promoting the diversification of its platforms into both Google and Amazon TV hardware.

Kim Kardashian: Hollywood has been a huge success for the company, reaching the top-five grossing for the Apple platform.

Every week Sports Illustrated publishes a series titled "Sign of the Apocalypse":

For the last 20 years, Sports Illustrated has collected and featured weekly signs from the world of sports that the Apocalypse is upon us: Tales of frenzied fans, egomaniacal coaches, future Hall of Famers who run afoul of the law, mind-boggling bureaucracy, violent behavior and tastelessness run amok...

The success of the recently released Kim Kardashian: Hollywood app has me feeling it might be a sign of the coming apocalypse. Over the past two weeks Glu Mobile, Inc. (NASDAQ:GLUU) has surged based off news coming out of the Google [[(NASDAQ:GOOG) (NASDAQ:GOOGL)]] I/O conference and the success of the recently released Kim Kardashian: Hollywood app.

Google I/O Conference

During the recent Google I/O conference, GLUU announced its plans to expand the available platforms supported to the Google Android TV platform:

"Android TV offers developers like Glu a meaningful way to extend high-fidelity, action gameplay to players in the living room," said Sourabh Ahuja, Vice President of Android and Cross Platform Development at Glu. "We are pleased to see the Google Play ecosystem evolving in a way that expands Glu's addressable audience and allows for further gameplay innovation. We anticipate a positive player response to Google's Android TV."

Play Station, Nintendo, and X-Box have long been the gold standard for gaming consoles, but the movement to software-based, web-enabled gaming will open an additional audience. The hardware looks similar to a gaming console, with a desk set box and game controller. The apps can be downloaded from the Google Play store and then linked to the cloud for continuous play.


While the news was met with a positive reaction, compatibility with Android-based TV hardware was already being developed. The Amazon (AMZ) Fire TV has already been developed using the Android platform:

Amazon Fire TV makes it easy for your customers to take their apps and games into the living room. With powerful performance and features such as second screen and multi-controller support, Amazon Fire TV gives you a familiar Android-based platform to extend your apps and games to the big screen.

Kim Kardashian: Hollywood

The majority of the run-up in price for GLUU can be attributed to the success of Kim Kardashian: Hollywood. The app reached the top-five grossing, before settling into the top-ten grossing apps on the iTunes store, joining the likes of Clash of Clans and Candy Crush Saga. On the Google Play store, the app hasn't been as successful, but has reached #15 overall in downloads, #20 in grossing, and #2 for new apps.


Estimates for the daily grossing from the iOS platform alone are running into $250K-$300K per day. There are certainly royalties that are being paid to the Kim K. camp that will come out of the revenue, but this success will be a huge boost for the company that had projected smaller revenue for 2Q14 and similar results for 3Q14:

(Source: GLU Mobile Earnings Conference Call)

The company initially issued guidance for 1Q14 of $38-40 million, and then came in with $47 million for the quarter. 2Q14 results will likely be coming out the first part of August, and I believe will exceed the $30-32 million guidance set out already. The launch of Kim Kardashian: Hollywood came in at the tail end of 2Q14, and will give the company a small boost, but will likely blow out 3Q14 guidance of $36-38 million.


In spite of the fact that I think the success of Kim Kardashian: Hollywood is a sign of the coming apocalypse, I am still a capitalist and enjoying the corresponding rise in the stock. The success of the app will help the company to continue blowing earnings out of the water.

Disclosure: The author is long GLUU. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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