(Confessions of a Stock Operator)
Start Date: 9/20/2018
At the heart of it; our trade ideas are generated primarily on ‘technical analysis’. By analyzing supply and demand; we make projections as to where a stock might head.
When Glu Mobile (GLUU) came on our radar it was the technical chart that said there was further upside. The upcoming ‘catalyst’, which can potentially improve their fundamentals, indicated to us, this stock has a real shot at providing investors/traders a 100% return on their money.
With an average buy level of $2.47*, we are half way there. What will provide ShortMeTina’s community with the other 50% we are seeking?
Before I get into that, let me give you a little background on this company that I’ve followed since 2012-2013.
Glu Mobile (GLUU) is a publisher and developer of free-to-play games for your smart phone and tablet. The company is focused on creating both original content and branded games.
It’s the mastermind behind games such as: Contract Killer, Diner Dash, Deer Hunter, Design Home and Tap Sports Baseball.
Glu has also teamed up with celebrities to produce games such as: Britney Spears: American Dream, Gordon Ramsay Dash, Katy Perry Pop, Kendall & Kylie, Kim Kardashian Hollywood and Nicki Minaj: The Empire.
Kim Kardashian's Hollywood
The roster of celebrities are impressive but outside of Kim Kardashian’s Hollywood, most of the other celebrity's games have been a major flop.
To date, KK:H is the biggest celebrity game in the company’s portfolio. It has generated about $200 million for the mobile gaming company since being released in 2014.
Can they generate that kind of revenue going forward?
I am betting that they can. And while Katy Perry and Nicki Minaj are stars within their own right; they couldn’t do it.
If any celebrity can post numbers the way Kim Kardashian West did, I believe it’s Taylor Swift.
Under new management, CEO Nick Earl (former EA (EA) executive), wants to take the anticipated Taylor Swift game in an entirely new direction. Unlike the previous re-skinning of games such as Kendall & Kylie, Nicki Minaj: The Empire, Katy Perry Pop, etc. Swift’s game is expected to be “innovative”. What that innovation looks like remains to be seen but considering the background in which Earl comes from, I am confident he will deliver.
I believe the stock is already gaining momentum into the run up of the game's release, which is expected sometime in November.
I am expecting the stock to near and hover around $4 going into her album's release.
Releasing the game around the time Swift is expected to drop her 6th studio album (Reputation) is a good move in my opinion. And it should do well in terms of generating buzz which can lead to downloads. The key at that point is monetizing those downloads.
If the game does well and the company can achieve profitability by Q1/18, I do believe our lofty target of $4.90 (100% return from our buy zone) can be achieved.
As I write this article, the stock is about 7% off its 52-week high of $3.83. Look at the chart below to see what I am looking at.
Tina "ShortMeTina" Ley (pronounced Lee) holds a Bachelor of Arts in Forensic Psychology and a Master's of Science in Mental Health Counseling and has been a stock market participant for over a decade. Currently a Full-Time Trader and Blogger of all things financial.