Glu Mobile is affected by Zynga's takeover news

The shares of mobile gaming company Glu Mobile ("Glu") rose 21% per cent last week after Zynga spent 180 million of dollars to buy omgpop, foreign media reported, spurred by rumours of a possible takeover. Analysts expect Glu revenue to grow in the next two years, 86%,glu 2.3 times times the expected revenue in 2013, down from the average for global mobile gaming companies and 58% below Zynga.

Despite a 61% per cent drop in share prices since the IPO in 2007, Glu will be profitable for the first time in 2014 as it moves to the so-called free value-added model. Glu, the investment firm Roth Capital, said the company could be attractive to Zynga, Dena, and the sale price that could exceed $6 per share and a premium of 34%.

"As a listed company, Glu's policy is not to comment on the takeover rumours," Glu CEO Nicola Demassi (Niccolo de Masi) said in an e-mail statement. Our management team and the Board of Directors are fully standing with the shareholders and recommending the appropriate purchase price to the shareholders. ”

Glu was founded in 2001, and most of the revenue came from smartphone games last year, and smartphone gaming is expected to account for 88% of revenue this year. Glu has been shifting to the free value-added model since 2010.

TechNavio, a market research firm, said the global market for mobile gaming had reached around $7 billion trillion in 2010. In the fourth quarter of last year, the U.S. mobile gaming industry grew 29% and users downloaded 81% of their downloads, according to NPD, the market research firm.

Analysts expect 2013 Glu revenue to reach $123 million trillion, up 86% from 2011, at a faster rate than most rivals.

Industry analysts point out that, while still losing money, Glu is still a good target because the buyer can cut costs by cutting some of its employees. Glu has about 575 employees.