Catalyst 1) sell off gave back the last runs profits 2) CEO Niccoli De Masi confirmed what Glu's rise in the China charts means for the company going forward, "We are making more money in Korea and China than we ever have in our history, and a lot of that's due to the fact that the new smartphones and tablets and so on are often being the first computer or primary gaming device that people are purchasing."
3) Glu has smartly been investing in China since 2007 when it acquired the China mobile gaming company, MIG China Co. Ltd, gaining Glu a license to publish games on the platform of China Mobile Ltd. (CHL). The words of Glu Mobile China's president Ray Cheng spoken two years ago in an interview are coming to fruition, "In a few years, Glu Mobile's advantage with smartphone games may begin to bear fruit in China because the country's construction of third generation (3G) mobile network sets is about to enter a more mature stage."
4) game spending is growing at a hyper speed in China too thanks to changes by the big China mobile companies in their carrier billing which is making monetization much easier for game
5) Lei Zhang, "We fully expect that sometime in 2013 that there will be a $10 to $15 million-per-month game in China. This should be not ignored by the Western market."
6) Anlayst-Darren Aftahi upgraded GLUU to Outperform and raised his price target from $2.50 to $4.50. Aftahi said in his note that "the company was improving its hit rate for new games and there was evidence Glu Mobile is seeing better-than-expected sales from smartphone games."
Next, Roth Capital resumed their coverage of Glu Mobile with a Buy rating and price target of $4.00.
And most recently on May 31, Canaccord Genuity's gaming analyst Michael Graham issued a Buy recommendation and $3.50 price target on his positive takeaways from Glu's Analyst Day Meeting. Graham specifically noted that the new third party publishing division should become a major part of Glu's business.
Great stuff!! Natty did a tip/top job of laying out the China case, which we've been following and posting about for awhile...The perfect set-up here, is NOTHING positive is priced into the stock, with SO MUCH positive poised to be unveiled during this 2H of 2013. Sure there will be market speed bumps along the way, but with ZERO debt, games climbing AND holding TOP GROSSING in Asia Mostly China, and all the new Glu-ON metrics for new titles, 3rd party publishing, the brisk video advertising, NOT to even mention SkillZ/RMG and Probability PLC partnerships/developments, I'd be adding shares down here. As Natty cited, fair price is around $4.41. If you price in just a few of the potential positve catalysts, even that looks cheap. Good LUck!!