Gambling deal lifts stock of online game maker Glu
NEW YORK (AP) — Shares of Glu Mobile Inc. got a boost Monday after the mobile game developer said it signed a gambling deal with Probability PLC.
THE SPARK: Glu said U.K.-based Probability will use existing Glu games to create mobile slot games under the Glu brand. The games will be distributed in Probability's regulated markets, first in the U.K. and Italy.
"We believe that mobile gambling momentum is beginning to accelerate on a global basis, and with this deal, Glu becomes an early mover," said Glu CEO Niccolo de Masi in a statement. He said Glu will likely expand its investments in real-money mobile gambling as more markets around the world open up to the practice.
Financial terms of the deal were not disclosed.
BACKGROUND: Over the past 12 months, Glu Mobile shares have gained about 85 percent. But the stock has erased a big chunk of those gains since Zynga Inc.'s initial public stock offering on Dec. 16 — shares of Zynga have lost more than three-quarters of their value since the IPO.
The companies have different businesses. While Zynga makes some mobile games, most of its revenue comes from games played on Facebook. Glu, meanwhile, focuses on cellphone and tablet games.
SHARE ACTION: Glu's stock rose 8 cents, or 2 percent, to $4.08 in late afternoon trading. On Friday, the stock had lost 6.5 percent after Zynga gave a disappointing forecast and investors sold off both the game companies' stocks.