Business

What is stopping the Upward Trajectory for Glu Mobile Inc. (NASDAQ:GLUU)?

Glu Mobile (NASDAQ:GLUU)

Glu Mobile Inc. (NASDAQ:GLUU)

Glu Mobile Inc. (NASDAQ:GLUU) shares hit a new 52-week high today but continued to hit resistance around the $2.75 level. One reason for the sellers to step in and halt any upward momentum may be the analyst’s consensus target price of GLUU shares. Six analysts cover GLUU shares. Four rate the shares as a “Strong Buy” and two rate the shares a “Hold” but their consensus price target is $2.85 – just $0.10 above current trading levels.

Glu Mobile (NASDAQ:GLUU)
Six Month Daily $GLUU Chart

Glu Mobile, Inc. (NASDAQ:GLUU) develops and publishes games for smartphones and tablets. Glu’s audience covers five areas – social networking, food, home, sports, fashion, and action. Some of its games are brands, such as Contract Killer, are developed by the company. Other games are celebrity focused such as Gordon Ramsey’s DASH. Sales are generated through digital storefronts that provide direct-to-consumer channels.

In November of 2016, Earl Thomas was named as the new CEO. The motivation for the change was the lack of revenue growth in a hot sector. Sales grew from $223.1 million in 2014 to just $249.9 million in 2015, then dropped to $200.6 million in 2016.

Thomas jettisoned the celebrity branded games which sucked royalty revenue from the firm (Taylor Swift being the lone survivor), and re-focused Glu’s creative team on developing new games. Games made with such celebrity names as Katy Perry, Britney Spears, and Nicki Minaj all, essentially, failed. So Thomas is betting on the creativity of Glu Mobile, Inc. (NASDAQ:GLUU) employees to return the company’s stock to its upwards trajectory. To help achieve this Thomas brought in Mike Olsen. Olsen had been running the Electronic Arts team that developed Star Wars: Galaxy of Heroes – EA’s #1 grossing game. Competition in the $40 billion mobile gaming space is fierce and developing popular games that can go viral can cost a lot of money – creative talent has often been the black hole through which funds disappear, never to return.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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