China’s Tencent has bought a 14.6 percent stake in Glu Mobile for $126 million. Call it the Kardashian effect, as the mobile game publisher struck gold last year with Kim Kardashian: Hollywood, a game that has the endorsement of reality TV celebrity Kim Kardashian.
The price is about $6 a share for 21 million shares, and it is a higher price than where Glu has traded for the past year. The deal places Glu Mobile’s value at about $863 million, reinforcing it as a major player in a mobile game market that could hit $30 billion this year. Tencent’s games division senior vice president, Steven Ma, is joining Glu’s board.
“Tencent is arguably the biggest gaming company in the world,” Glu CEO Niccolo De Masi said. And that might not be an understatement. Tencent is the biggest game company in China, and it has stakes in big Western game makers such as Epic Games, Riot Games (whose League of Legends is one of the biggest money-making games in the world), and Activision.
Glu is also making games based on the lives of Katy Perry, Kendall and Kylie Jenner, and now Britney Spears.
Glu reported $2.1 million in profit, or 2 cents per share, on sales of $62.4 million for the first quarter. Wall Street expected a loss of a penny a share on sales of $51.6 million.