Glu Mobile Stock Prediction: Lack of Hit Mobile Games Makes GLUU A Short Candidate

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

Glu Mobile Stock Prediction


  • The Evergreen Strategy of reducing costs is not helping Glu Mobile at all.
  • What Glu Mobile needs is a new hit mobile game.
  • The $45.5 million acquisition of Crowdstar, Inc. is not going to help much in improving Glu’s poor performance in mobile games monetization.
  • Unless Glu Mobile comes up with a hit mobile game this year, I predict the stock could dip to below $2 price levels.
  • Algorithmic forecasts are also very negative for GLUU. It could be profitable to short this stock now.

I usually do not recommend shorting stocks. I prefer making buy endorsements. However, Glu Mobile (GLUU) is blatantly open to shorting due to its persistent lack of hit mobile games. It is already 2017 and yet Glu has failed to replicate its initial 2014 success with Kim Kardashian: Hollywood.

A game publisher that has no title among the top 50 top grossing iPhone game in America is endangered. Glu’s ‘evergreen strategy’ (announced last September) of focusing on better monetising its existing games portfolio is not working. Four months after the evergreen strategy is announced, I can confidently say it is a failure.

ThinkGaming’s estimates daily sales chart loudly exposes Glu’s vulnerability to the short-sell crowd. The old Kim Kardashian game remains Glu’s best-performing iPhone game but it is only making an estimated average daily sales of $26k from American iPhone gamers. GLUU’s future is really bleak when it does not have a mobile game capable of earning at least $500k per day in America. America is still the 2nd biggest market for mobile games.

Glu Mobile Stock Prediction


A quick check on SensorTower also revealed that Kim Kardashian: Hollywood’s worldwide net sales was only $1.3 million. Racing Rivals also only made $800k last December.

Glu Mobile Stock Prediction

(Source: SensorTower)

The $45.5 million acquisition of Crowdstar is not also going to help improve the recent quarter performance of Glu Games. TipRanks’s data showed Crowdstar’s two iPhone games are only generating estimated daily sales of $51k from U.S. iPhone players.

December global estimates of SensorTower for Crowdstar’s two best games are also unimpressive. The net global sales of the iOS/Android versions of Crowdstar’s Design Home and Covet Fashion is only $3.5 million.

Glu Mobile Stock Prediction

(Source: SensorTower)

Sad but true. I expect Glu to report very weak Q4 2016 gross bookings. The poor December performance of all its current mobile games told me that the company will most likely report less than $45 million in revenue for Q4 2016. I also expect the company to report fourth quarter net losses of more than $5 million.

My Recommendation

What Glu needs is a new hit mobile game. It cannot improve monetization of declining titles like Kim Kardashian: Hollywood and Racing Rivals. Crowdstar’s games aren’t going to deliver $100 million in annual sales. Perhaps Glu needs to ask Tencent’s (TCEHY) assistance in developing new games outside its current ‘Hollywood and fashion’ genres.

Based on the persistent results of Sensor Tower and ThinkGaming, the top-grossing mobile games genres are strategy/fighting, puzzle, and social casino games. It will be beneficial for Glu Games, Inc. if its investor Tencent will allow it to make a copycat version of Supercell’s billion-dollar game Clash Royale game. If not, at least allow Glu to publish successful Chinese games for international releases. Tencent owns some of the top-grossing Android games in China. The China-only King of Glory game of Tencent was the world’s sixth top-grossing mobile game in the world in December 2016.

King of Glory is the mobile version of the hit PC MOBA game League of Legends (also owned by Tencent). Glu Mobile can port an English version of this game and call it ‘War of Legends’ and promote it in North America, Asia, and Europe. If Tencent refuses to share King of glory, Glu can instead use some of its remaining cash to acquire Vainglory-maker Super Evil Mega Corp. Vainglory is also a MOBA game that’s earning $1.5 million in net monthly sales. Vainglory could become a $5-$10 million monthly sales performer if properly promoted by Glu Games Inc.

Nevertheless, Tencent also has a 21.5% stake in Glu Games, Inc. Tencent, therefore, has compelling economic reasons to help Glu improve its business. My ideal scenario is for Tencent to buy controlling stake in Glu and replace/augment its current management. The failed ‘evergreen strategy’ of Glu’s management is a clear sign of maladroitness. Glu needs a new hit mobile game and its current managements seems to lack enthusiasm toward making/publishing new games.


I have a small short position on GLUU. I am confident that Q4 numbers will be less than $45 million in revenue and -$5 million in net income. If my guesstimates proved true, GLUU could drop 5-10% after earnings. Glu’s games are performing poorly and its stock deserves an attack from the sell-side community. The 90-days and 12-month algorithmic forecasts of GLUU are all also negative. I trust I Know First’s deep-learning computers to turn my bear call for GLUU into a winner.


Glu Mobile Stock Prediction

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized everyday, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

I Know First Success With GLUU

I Know First has bearish on GLUU in past forecasts. On October 9, 2016, an I Know First analyst wrote a bearish article on GLUU and discussed the difficulties the company has to deal with in order to renew itself. In accordance with I Know First’s self-learning algorithmic forecast, GLUU shares declined over 40% to date.

Glu Stock Prediction

This bearish forecast for GLUU was sent to I Know First subscribers on October 7th, 2016. To subscribe today click here.

Glu Mobile Stock Prediction