Why Glu Mobile Inc. Shares Tumbled Today

Is Glu Mobile's drop meaningful? Or just another movement?

May 30, 2014 at 4:01PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Glu Mobile (NASDAQ:GLUU) fell nearly 11% Friday after the mobile games specialist announced a new secondary offering of 8.575 million shares.

So what: Glu Mobile priced the offering at $3.50 per share this morning -- or a nearly 14% discount to yesterday's close -- so it'll gross around $30 million. Of that, Glu expects to net roughly $27.8 million, which it plans to use for working capital and other general corporate purposes, "including the acquisition of, or investment in, companies, technologies, products or assets that complement Glu's business."

Now what: Glu Mobile hasn't been shy about making acquisitions. In fact, it kicked off this month with a 10% pop thanks both to its solid first-quarter results and an agreement to acquire DASH series game-maker PlayFirst for 3 million shares of common stock. Still, the stock had already given up nearly all of its post-earnings gains going into yesterday's close, and today's pullback is certainly understandable given the additional dilution that comes with the offering.

That's not to say Glu Mobile can't put its freshly filled coffers to good use if it has another promising acquisition target in mind, but I'm personally still skeptical of the economics behind the free-to-play game space. For now, while this could be a great opportunity for bullish investors to open or add to a position, I'm opting to stay on the sidelines.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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