Gossip may be the stuff of idle minds in other areas of life, but it’s fodder for antsy stock buyers ("buy on the rumor, sell on the fact").
However, while neither party has tipped its hand yet, rumblings of a possible union between mobile game developer GLU Mobile (Nasdaq: GLUU) and Microsoft (Nasdaq: MSFT) have been growing louder and translated into higher share prices.
The rumor first gathered steam in the middle of this month, which has made the San Francisco-based GLU Mobile‘s share price soaring despite the generally muted market. Several sources are gave the rumors legs that GLUU had received a takeover bid of $7 per share U.S. from the corporation known as "Mr. Softee".
A spokesperson for Microsoft declined comment on the renewed chatter. A GLU Mobile spokesperson was not available.
GLU is focused on creating compelling original IP games such as GUN BROS, DEER HUNTER, BLOOD & GLORY, and SAMURAI VS. ZOMBIES DEFENSE on a wide range of platforms including iOS, Android™, Windows Phone, Google Chrome, and MAC OS.
GLU’s unique technology platform enables its titles to be accessible to a broad audience of consumers globally. The Microsoft connection to the projects on which the company has worked – and the ones already in the pipeline – has further fed the perception that "Mr. Softee" may be "Mr. Right" for GLU.
To quote one source, Fyx News, "Microsoft recently made some big announcements, including their new Surface tablet to compete with Apple's iPad and their buyout of Yammer for $1.2 billion (U.S). The acquisition of GLUU does make sense if MSFT is aiming to get a better hold in the tablet/mobile gaming arena. Also, the price tag for a GLUU buyout would be a bargain compared to Yammer. Buying out Glu Mobile for only $7/share would be nowhere near $1.2 billion.”
(The author, incidentally, also disclosed that he or she owns shares in Microsoft).
As another source put it, at $7 per share, Glu Mobile would trade at a Price/Earnings-ratio of 44 times expected 2013 earnings.
Late Friday, shares went for $5.59 U.S., up 13 cents, or 2.4% from the day before. Its 52-week high, reached in mid-July of last year, registered $6.10, which would make a seven-dollar price quite the premium. Whether the rumors are confirmed in the heat of July remains to be seen.
