November 5th, 2007 by Arjan Olsder Posted in Companies & M&A | 1 Comment »
After Glu’s financial results where revealed last Thursday, the shares seem to have taken a big dip as investors don’t seem happy with the direction of where the mobile games publisher is moving.
As Yahoo’s chart reveals, the shares where well above the 10 thousand line on closing last Thursday. Friday however the shares opened above 7 thousand and closed at 6.98. Along the Friday, the shares have been as low as 6.71, which was an all-time low for Glu as the share dip after the IPO was even less incredible.
Looking at the ownership of the company, Greg Ballard, president and CEO of Glu, has started to sell his shares in Glu. On November second, two Form 4 SEC filings (1) (2) occurred where Greg Ballard sold big amounts of GLUU shares which where owned by his trust fund. The actual sales took place from 31-10-2007 to 01-11-2007, and so started before the financial release of the company, meaning he might have expected sales to drop. At the start of the transactions, he owned 208,402 shares. He is now down to 203.952 shares, meaning he sold 4450 shares or 2.14%. Other Form 4 SEC filings reveal more shares have been sold in the past when share values dipped.
So it seems after loosing a big part of the Hasbro/Atari brands and the departure of Kristian, Glu is in need of very good news to restore stock value and satisfy investors in the mobile games publisher.
Thuesday update:
GLu made it to the top of Fool.com‘s worst stock trades. This is what Fool.com had to say;
Next up is mobile games maker Glu Mobile, which forecast fourth-quarter revenue well below what the Street had expected.
At least one Fool saw the bad news coming. Here’s a pitch from CAPS investor StKitt from two weeks ago: "Too many company press releases (two so far this week) equal idle hands. One begins to suspect pumping to dump."
Maybe that’s too harsh. And, besides, analysts are often wrong when it comes to forecasts. Why is this miss so special? Good question. My response is that mobile gaming is an explosive market that’s lifting the fortunes of many businesses, including the Finnish phone company from the last section and Stock Advisor pick Electronic Arts (Nasdaq: ERTS). If Glu can’t make its numbers during the good times, what happens when the market goes flat — or, worse, south?
According to the Wallstreet Times, Glu was the biggest declining stock on the Nasdaq stock exchange. Marketwatch wrote a story about the cause and effect of Glu’s plunge;
"Our Buy rating was predicated on the company delivering faster than expected revenue growth in being able to replace revenue attributable to Hasbro-related properties," Goldman Sachs analyst Mark Wienkes wrote in a note to clients. "we were clearly too optimistic and sense the industry is experiencing growing pains that will constrain any potential upside surprises for the next few quarters."
November 5th 2007:
5,954 USD (-14,7%) and falling…