March 17th, 2008 by Arjan Olsder Posted in Companies & M&A | No Comments »
Glu Mobile’s stock prizes took another dip last thursday as Deutsche Bank downgraded the stocks to ‘sell’. Analysts of the bank did this as economic concerns for the sector risen.
On thursday, the shares fell 39 cents, or 8.2%. Analyst Jonathan Goldberg from Deutsche Bank lowered his price expectation from $ 8 to $ 3.
The economic concerns come from an increase in licensing costs. Though Glu has played safe on a lot of licenses, competitors are willing to put a lot of money on the table to acquire big time licenses. Glu has little room to manoeuvre right now according to the analyst.
The analyst also claims the growth outlook of Glu remains cloudy which would suggest that the company is struggling to improve margins. Glu is expecting 24% growth for this year, while operators are targeting triple digit growth.
