If you play cell-phone games like Monopoly or World Series of Poker, you're probably depositing cash into Glu Mobile's (NASDAQ:GLUU) coffers. The company also knows how to play Wall Street, snagging $84 million in its IPO yesterday.

After posting a 7% increase, the stock quickly surrendered much of its gains. It's now hovering near its $11.50 offering price. This pales in comparison to the 30%-plus returns of recent IPOs like Riverbed Technology (NASDAQ:RVBD) and BigBand Networks (NASDAQ:BBND), which suggests to me that investors think Glu's success comes with some land mines.

Glu has developed more than 100 mobile games, distributing them primarily through carriers such as Verizon Wireless (NYSE:VZ), Sprint Nextel (NYSE:S), Cingular Wireless, and Vodafone (NYSE:VOD). These companies accounted for about 55% of Glu's revenues.

Carriers list the games on a phone's menu, and when a customer pays $5 to $8 for a game download, the carrier takes a 30% cut. Since the carrier has already paid for its infrastructure, much of that revenue becomes pure profit.

The mobile game market is growing at a heady rate. A Juniper Research study projects that the market will grow from $3.1 billion in 2006 to $10.5 billion by 2009. That's a juicy 50.2% compound annual growth rate.

Its 150 carrier relationships are only one of Glu's competitive advantages. The company's system can translate games to more than 1,000 handset models, a tricky feat that requires an understanding of different screen sizes, sound capabilities, and even key configurations.

Glu also enjoys extensive relationships with established game brands such as Atari, PopCap Games, Sega Europe, PlayFirst, and Turner Broadcasting. Working with popular titles and properties helps increase the likelihood that audiences will embrace a Glu game.

Glu's growth has proved equally impressive. From 2003 to 2006, its revenues surged from a mere $1.7 million to $46.1 million. However, it endured a net loss of $12.3 million last year.

Despite its success, Glu's small pool of big customers may prove a significant weakness. Losing just one of its largest clients could devastate its revenue. Glu's placement in a carrier's system can also pose problems; if its titles aren't listed at the top of a carrier's menu, users might overlook it. Bigger firms like Electronic Arts (NASDAQ:ERTS), with powerful brands such as Tiger Woods, NASCAR, and Lord of the Rings, might also outmuscle Glu's offerings for prime placement.

Given these considerable risks, I think investors should expect volatility from Glu's stock price. That was the case with JAMDAT several years ago, and the company ultimately decided to sell out to Electronic Arts. In the meantime, Fools are likely better off playing Glu's games, not its stock.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is ranked 1,590 out of 24,619 in Motley Fool CAPS. Vodafone is an Inside Value pick. The Fool has a disclosure policy.