Glu Mobile Inc.: $3 GLUU Stock About to Go Vertical?

Glu MobileOne of last month’s hottest names was Glu Mobile Inc. (NASDAQ:GLUU) stock. GLUU stock was up almost 85% at one point in February on news that it signed a partnership with a music superstar and on encouraging results from the release of its latest celebrity-themed game. Glu Mobile stock has since pulled back about 22.5%, but going forward, the stock is set to rise long-term.

Here’s why…

Glu Mobile made a name for itself a couple of years ago when the mobile game maker partnered with reality TV star Kim Kardashian. Kim Kardashian: Hollywood was released in the summer of 2014 and was an instant hit.

Last week, Glu Mobile CEO Niccolo De Masi said that the game has brought in $100 million in its first five quarters or about one-quarter of the company’s market cap. (Source: “Here’s How much Kim Kardashian’s Hit Game Has Made,” Fortune, February 19, 2016.) De Masi also noted that the game has been downloaded about 42 million times, with users logging in for about 3.3 billion sessions.

Glu Mobile is now hoping to mimic that success with the release of its latest celebrity-themed game. This time its Kim’s younger sisters’ turn. Glu Mobile released Kendall & Kylie, featuring the Jenner sisters, just a few weeks ago.

The game already seems to be a hit for GLUU stock. It quickly jumped to the top of the download charts on Apple Inc.’s (NASDAQ:AAPL) app store upon its release. Like all of Glu Mobile’s games, Kendall & Kylie is free to play but users can purchase extras to enhance the experience.

It’s still too early to tell whether the Kendall & Kylie game will be as successful as their older sister’s, but the game is getting good reviews among users so far on the Apple app store. Kendal and Kylie also have about 150 million combined social followers, so if even a small percentage of them jump on board, the game is bound to be a financial success for GLUU stock. (Source: “Kendall And Kylie Jenner Video Game Gives Glu Mobile A Lift,Investors Business Daily, February 18, 2016.)

The success of the Kardashian game made it easier for Glu Mobile to sign deals with other celebrities, too. Glu Mobile has signed partnerships with Katy Perry, Nicki Minaj, Britney Spears, and Gordon Ramsey, so it has a few weapons in its arsenal to keep fueling growth.

Glu Mobile’s latest celebrity signing, however, has the potential to be another home run for the company. GLUU stock made headlines in February over its partnership with Taylor Swift to deliver a game in December 2016 featuring the singer. The partnership is largely responsible for the recent surge in GLUU stock’s share price.

But having a celebrity name attached to a game is not always a guarantee for success. Katy Perry Pop was released last November but the game has underperformed. De Masi didn’t give out sales figures, but in Glu Mobile’s latest earnings call, De Masi called the Katy Perry game “one of our biggest disappointments in 2015.” (Source: “Glu Mobile’s Kim Kardashian, Katy Perry Whiffs Show Celeb Games Are Risky Business; Up Next: Taylor Swift,” International Business Times, February 10, 2016.)

Not every game Glu Mobile releases will be a home-run like the Kim Kardashian game nor will it strike out like Katy Perry Pop. Glu Mobile’s success as an investment will require a stream of single, doubles, and even a triple once in a while. The key for Glu Mobile is to learn from the mistakes of its Katy Perry game, keep signing the big celebrities, and keep the fresh games coming.

That should keep Glu Mobile on the right track and set the stage for GLUU stock to take off.