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Glu Mobile Has Another Dream Opportunity


  • Glu Mobile isn't short of potential hit games.
  • The latest celebrity game featuring Britney Spears has some initial positive reads, but the numbers so far don't suggest a mega hit.
  • Regardless of the games outcome, the stock is valued based on limited risk and potential high reward.

After some very high profile disaster games, Glu Mobile (NASDAQ:NASDAQ:GLUU) has another opportunity with a new celebrity game. With the recent success of Tap Sports Baseball 2016, the mobile-game developer has the chance to finally rebuild investor confidence.

Even after the disappointing Q2 guidance, my question to investors was to figure out why one would sell the stock. With a large cash balance, a solid IP platform and a strong revenue base, the stock was too cheap to pass up. Now the question is whether the new Britney Spears game will provide a big catalyst for the stock.

Source: Glu Mobile website

Is Britney Still A Big Star?

When Glu Mobile originally signed up a big celebrity lineup after the success of the Kim Kardashian game, the initial thought was that Katy Perry and the Jenner sisters were the big time acquisitions. Britney Spears is an aging star beyond her prime, but the company thought the older fan base might provide more discretionary cash for playing the game.

From a social media standpoint, Britney Spears doesn't stack up compared to the other celebrities in the lineup. At the end of April, Glu Mobile provided the following social media stats for their celebrity games.

Of the 1.4 billion total social followers inked, Britney doesn't even reach the 10% level with 98 million followers. She trails far behind Katy Perry and Kylie & Kendall and even trails Nicki Minaj by nearly 30 million users.

So clearly Britney isn't the big star on social media that would probably typically indicate the amount of followers likely to play a mobile game, but the quality of the game and the ability of users to spend money are crucial as well.

The game is getting a decent level of downloads, but nothing like the previous Glu Mobile celebrity games. The question now

This article was written by

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Stone Fox Capital Advisors, LLC is a registered investment advisor founded in 2010. Mark Holder graduated from the University of Tulsa with a double major in accounting & finance. Mark has his Series 65 and is also a CPA.

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Analyst’s Disclosure: I am/we are long GLUU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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