Glu Mobile Inc. (NASDAQ:GLUU) announced that it has acquired a controlling interest in Crowdstar, a global leader in mobile and social gaming, developing entertainment for women all around the world, in an all-cash transaction valuing Crowdstar at approximately $45.5 million. The combination of Crowdstar and Glu positions Glu to become the leader in the growing fashion game category as Glu continues to diversify its content portfolio.
“We are excited to welcome Crowdstar’s talented team into the Glu family,” saidNick Earl, newly named CEO of Glu Mobile. “Crowdstar is an innovative company that we have long respected, with a proven track-record of building highly social and interactive mobile community platforms. By joining forces through this strategic and complementary transaction, we plan to leverage Crowdstar’s valuable IP and veteran team, which is based right here in the Bay Area, to continue creating exciting cross-platform content that captures and resonates with even more users.”
As a leading developer in the fashion games space, Crowdstar’s portfolio currently features Covet: Fashion, a fashion entertainment app that allows users to style head-to-toe looks with actual brands. Having achieved over 30 million downloads worldwide, Covet: Fashion has consistently held a position in the top 125 on the U.S. Top Grossing charts for all iPhone apps over the past two years. On November 2, 2016 Covet: Fashion held the #80 Top Grossing position for all iPhone apps on Apple’s App Store in the U.S. Crowdstar currently has approximately 90 employees and is headquartered in Burlingame, California.
Crowdstar’s forthcoming platform product, Design Home, utilizes the advanced Covet engine and features platform capabilities targeted toward the interior and home design app markets including photo-realistic graphics. Design Home is currently in beta testing in Canada and reached #54 Canada App Store Top Grossing chart position for all iPhone apps on November 2, 2016. We expectDesign Home to be launched in early 2017.
“I am proud of our team for consummating such an exciting transaction that we believe offers significant growth opportunities for Glu in the fashion and home categories,” said Niccolo de Masi, Glu’s Executive Chairman. “Specifically, the Crowdstar acquisition brings to Glu a leadership position in the fashion category and a potential long-term annuity in Covet: Fashion. In addition, Design Home is exhibiting promising potential in early beta results as a platform, and we are optimistic that it can be a significant growth driver for the company in 2017.”
Glu also believes it has the potential to realize significant user acquisition, advertising revenue and celebrity partnership synergies by integrating Crowdstar. (Original Source)
Shares of Glu Mobile are up nearly 6% to $2.05 in after-hours trading. GLUU has a 1-year high of $4 and a 1-year low of $1.84. The stock’s 50-day moving average is $2.17 and its 200-day moving average is $2.35.
On the ratings front, GLUU has been the subject of a number of recent research reports. In a report issued on November 1, Canaccord analyst Michael Graham reiterated a Hold rating on GLUU, with a price target of $3.00, which implies an upside of 60% from current levels. Separately, on October 28, Roth Capital’s Darren Aftahi reiterated a Hold rating on the stock and has a price target of $2.00.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Graham and Darren Aftahi have a yearly average return of 7.3% and a loss of 7.6% respectively. Graham has a success rate of 49% and is ranked #241 out of 4165 analysts, while Aftahi has a success rate of 40% and is ranked #3859.
Glu Mobile, Inc. designs, markets and sells mobile games. It develops, publishes and markets a portfolio of games designed to appeal to a broad cross section of the users of smartphones and tablet devices who download and make purchases within its games through direct-to-consumer digital storefronts, such as the Apple App Store, Google Play Store, Amazon Appstore and others.