GLUU Stock: This Could Be Big for Glu Mobile Inc.

Kardashian made it easier for GluShares Glu Mobile Inc. (NASDAQ:GLUU) have been on a tear lately, up about 68% last week alone. Investors who held onto GLUU stock were nicely rewarded. But before you kick yourself for not making the trade, there might still be some upswing left in Glu Mobile stock. At least Tencent Holdings Ltd seems to think so, which just increased its stake in the mobile game app developer to 21.5%.

Tencent, which offers online games through its Internet service portal in China, bought four million more shares of Glu Mobile on February 25. GLU stock was purchased at an average price of $3.65 a share for a total value of about $14.5 million (Source: “Glu Mobile Inc. (GLUU) Director Holdings Ltd Tencent Acquires 3,993,740 Shares,” Financial Market News, February 26, 2016.)

So what does Tencent see in the mobile game maker?

If you recall, Glu made a name for itself a few years ago by partnering with reality TV star Kim Kardashian. “Kim Kardashian: Hollywood” was released in the summer of 2014 and was a smash hit.

Last week, Glu Mobile’s CEO, Niccolo De Masi, said that the game has brought in $100 million since it was launched. (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. That’s a big deal for a company whose market value is only about $500 million.

The game falls into the “freemium” category. The app itself is downloaded for free, but users can purchase extras to enhance their gaming experience.

The success of the Kardashian game made it easier for Glu to sign deals with other celebrities.

The next big celebrity theme to follow the Kardashian game was “Katy Perry Pop,” but the game has bombed since it was released last November. De Masi didn’t give out sales figures, but in Glu’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.)

Glu made up for the bad news by announcing a partnership with one of the biggest singers in the music industry in early February. The company made headlines that it was partnering with Taylor Swift to deliver a game in December featuring the singer. The partnership is largely responsible for the recent surge in its share price.

But for now, Glu is hoping to replicate the success of the Kardashian game by mining the Kardashian family once again. This time it’s Kim’s younger sisters who are getting the spotlight. Glu released “Kendall & Kylie,” a game featuring the Jenner sisters, a couple of weeks ago.

The game already seems to be a hit for GLUU stock. The game quickly jumped to the top of the download chart of the App Store by Apple Inc. (NASDAQ:AAPL) upon the game’s release. Like all of Glu’s games, “Kendall & Kylie” is free to play, but users can purchase extras to enhance the experience.

This is an ingenious strategy. There is no risk at all to download and try the game. Users who don’t like it can simply discard it. But for those who get hooked, they are bound to purchase many extras.

It’s still too early to tell whether the “Kendall & Kylie” game will be as successful as the older sister’s game, but it is getting good reviews among users so far on the App Store. Kendal and Kylie also have about 150 million combined social followers, so if even a small percentage jumps on board with the game, it’s bound to be a financial success. (Source: “Kendall and Kylie Jenner Video Game Gives Glu Mobile A Lift,” Investor’s Business Daily, February 18, 2016.)

With other upcoming games from Glu featuring Britney Spears and Nicki Minaj planned for release later this year, investors might want to have a closer look at GLUU stock.

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