Nick Earl, the new CEO of Glu Mobile Inc. (NASDAQ:GLUU) seems to believe the stock of the celebrity videogames publisher is cheap going by his move to invest thousands of dollars of his own money to acquire 100,000 shares in the company.
Earl, who has only worked as Glu CEO for a few days, purchased the shares at $2.09 apiece. With the latest stock purchase, Earl owns 184,638 shares in Glu worth about $385,000. Filings show Earl purchased the shares on November 17.
Earl replaced Niccolo de Masi as CEO of Glu on November 3. He earlier worked as Glu’s head of global studios.
Turning around Glu
As CEO, the burden rests squarely on the shoulders of Earl to turn the company arou d. Benjamin Smith, a member of Glu’s board, recently hinted that Earl is the right leader at the right time to help the company execute on its initiatives and create long-term shareholder value.
But Earl is inheriting the leadership of Glu at a time when the company is struggling to grow revenue amid intense competition and difficulty in creating blockbuster titles. If Glu’s latest quarterly financial performance is anything to go by, Earl and other shareholders in the company will have to be patient before they can reap the benefits from their investment in the company.
Glu generated revenue of $54.1 million in 3Q16, a decline from revenue of $63.3 million in the same period a year earlier. Total bookings of $51.3 million in the latest quarter also eased from bookings of $64.4 million in the comparable period last year.
The company’s bottom line also deteriorated in the latest quarter compared to last year. EPS loss of $0.33 in 3Q16 compared with EPS profit of $0.06 in 3Q15.
Glu executives are expressing hope that the company can monetize its existing titles to drive growth even as it works on new products. Eric Ludwig, Glu’s CFO, said the company has a strong balance sheet.
As part of the efforts to unlock new growth opportunities, Glu acquired Crowdstar, a specialist in fashion games, for $45.5 million. The fashion game niche fits well with Glu’s celebrity game business. Crowdstar has a game called Covet: Fashion that has been downloaded more than 30 million times.
