Glu Mobile’s CEO Suddenly Announces Resignation
Mobile game-maker Glu Mobile (NSDQ: GLUU) has announced the resignation of its President and CEO Greg Ballard. While the announcement comes suddenly, it may not be a surprise given that the San Mateo, Calif.-based has struggled to keep its stock price above a dollar and remain relevant in the new iPhone-driven world. Ballard will remain on board until a new leader is named, and the company has retained Martha Josephson of Egon Zehnder, an executive recruiting firm, to help identify candidates. Release.
The company was careful to say that Ballard’s departure doesn’t have to do with any immediate financial results. It confirmed that its results for the second quarter so far are in line with the guidance that the company provided in May, and that it also expects financial results for the full year to be consistent with its previously announced guidance. It also remains committed to being cash flow positive from operations during this fiscal year. In December, the company instituted a big cost-cutting program, which included Ballard asking the board to reduce his salary by 25 percent.
Ballard: “After six years, I have decided the timing is right to look for a new challenge. I’m incredibly proud of how much we accomplished during my tenure, having built what I believe to be a world-class global enterprise. The Glu board and I also share the view that this is a good time to bring in new leadership for the company, as we focus on returning to generating positive cash and begin even greater investment in next-generation mobile platforms. I especially want to thank the tireless and dedicated efforts of the worldwide Glu team, who I continue to believe are the best in the business.”
When the iPhone launched its new application store a year ago, Ballard was hesitant to invest to heavily in the platform, unlike some of its peers Electronic Arts (NSDQ: ERTS) and Gameloft (EPA: GFT). While that may have seemed like a prudent approach, it ended up setting the company back when it came to launching new titles on those next-generation devices. Just recently, Glu announced it was releasing four new titles through its partnership with Activision (NSDQ: ATVI), including such high-profile brands as
Wow. Suddenly resigning + removed from the board + no replacement on hand, only exec recruiter named = Hit The Road, Jack.
Expect major reorg of the company and possible clearing out of former CEO's top 2 or 3 exec picks.
NOT a recommended stock pick!
It's not looking good for Glu. Borrowing to keep the ship afloat, taking on large obligations with licensors ; a lot of risk for the company starting to pile-up. Will be interesting to see if the MIG relationship generates profits or becomes a sinkhole.
Glu finish out 2009 with declining revenues and enter 2010 with a wicked hang-over. The new CEO has 6 months to save the patient and get it into recovery mode.
…oh, and I should add: Mr. Ballard did pretty well when you consider the relative performance of Glu's peers. Glu scaled up, passed through an IPO window, created value for some share owners and kept the train rolling for 6 years.
The mobile games industry trend-line has never revisited the apex of the initial excitement the hype-cycle had five years ago. Now, the economy is in transition, games and entertainment is in transition, especially portables, and the value of a pure-play mobile games company is in question. Clearly, Wall Street think so if you look at the value of GLUU. And, if you look at what consumers are buying on their non-iphones, where the "billions of users" are, games consumption is flat year over year in terms of growth.
Ballard, can hit the road, but he does so having an IPO, along with a little pile of personal income from selling his options, and a great track record within the industry.
I wonder if Ballardâs departure had anything to do with Guitar Hero 5 running way behind schedule and completely missing the 9/1 console launchâ¦it is nearly a month away and I havenât heard anything on it.