2-Star Stocks Poised to Plunge: Glu Mobile?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mobile game publisher Glu Mobile (NAS: GLUU) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Glu Mobile's business and see what CAPS investors are saying about the stock right now.

Glu Mobilefacts

Headquarters (founded)San Francisco (2001)
Market Cap$308.7 million
IndustryHome entertainment software
Trailing-12-Month Revenue$66.2 million
ManagementCEO Niccolo de Masi (since 2010)
CFO Eric Ludwig (since 2008)
Return on Equity (average, past 3 years)(88.8%)
Cash/Debt$32.2 million / $0
CompetitorsDena
Electronic Arts
Gameloft

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 14% of the 186 members who have rated Glu Mobile believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, fellow Fool Rich Duprey (TMFCop), succinctly summed up the underperform case for our community:

The "freemium" model it's pursuing isn't as easy as it looks. It's also burning through cash growing the business and has no lines of credit meaning dilutive stock offerings or expensive debt may be in its future.

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At the time this article was published

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