2-Star Stocks Poised to Plunge: Glu Mobile?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mobile game publisher Glu Mobile (Nasdaq: GLUU  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Glu Mobile's business and see what CAPS investors are saying about the stock right now.

Glu Mobile facts

Headquarters (founded) San Francisco (2001)
Market Cap $308.7 million
Industry Home entertainment software
Trailing-12-Month Revenue $66.2 million
Management CEO Niccolo de Masi (since 2010)
CFO Eric Ludwig (since 2008)
Return on Equity (average, past 3 years) (88.8%)
Cash/Debt $32.2 million / $0
Competitors Dena
Electronic Arts
Gameloft

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 14% of the 186 members who have rated Glu Mobile believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, fellow Fool Rich Duprey (TMFCop), succinctly summed up the underperform case for our community:

The "freemium" model it's pursuing isn't as easy as it looks. It's also burning through cash growing the business and has no lines of credit meaning dilutive stock offerings or expensive debt may be in its future.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 05, 2012, at 11:16 PM, BullBearPiggy wrote:

    Is this article a joke? "On CAPS, 14% of the 186 members who have rated Glu Mobile believe the stock will underperform the S&P 500 going forward."

    Wow 14% !!!!!!

    Fool Rich Duprey looks like a fool with his comment about possible dilution as well considering the CEO publicly stated today that there will is no current intention to raise capital in 2012.

    But I guess I shouldn't be surprised that Motley Fool posted another ridiculous article bashing GLUU - in the meantime anyone that has ignored them has profited nicely.

  • Report this Comment On April 08, 2012, at 4:21 PM, bmc007 wrote:

    Agreed, I've made some very nice money on GLUU in the past and I currently have a holding as I believe there is more upside for this company.

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