Earlier this year, Glu Mobile (NSDQ: GLUU) changed course, having realized it shouldn’t have taken a wait and see approach on Apple’s App Store, and aggressively started to move into the smartphone space, by developing for the iPhone, Android and Nokia’s N-Gage.
The new direction wasn’t easy. The company was losing money and had to trim headcount and other expenses in order to afford the remaining payments on an acquisition. Now, the San Mateo, Calif.-based company’s stock is soaring without any obvious reasons. The stock has jumped 84 percent to $1.49 a share today, up from 81 cents a week ago. The stock’s big surge came on Friday when it gained 26 cents or 27 percent to close at $1.22. The company’s stock price is low, so it can fluctuate easily, but still “clearly something is going on here,” Barron’s reports.
What could it be? Generally, it could hint that a buy-out is in the works, but there’s no evidence of that. Most recently, the company launched a game based on the hit movie “Transformers,” and last monday, CEO Greg Ballard and CFO Eric R. Ludwig, presented at the UBS Global Technology & Services.
But maybe Glu’s stock is rising because investors believe the new iPhone 3.0 software update coming this week will benefit Glu, like many other companies. The software update will allow companies to sell users additional items within a game, like weapons or additional levels, which may make games more profitable. Apple’s newest phone, the iPhone 3G S, will also go on sale Friday, which may also create a jump in app sales.
Perhaps, the most boring explanation is that the increase is a reflection of Glu’s hardwork. The company said it expects to record revenue of $18.75 million to $19.25 million, with a non-GAAP per share loss of 4 to 5 cents in the June quarter. For the full year, the company expects revenue of $78.5 million to $80 million and a non-GAAP per share loss of up to 7 cents. A spokesperson had not replied to requests for comments.
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