Here you can find our previous trading ideas. Please note that these are not “live” any more!


Published January 1st, 2013:

We are taking a more cautious stance towards Glu Mobile short term.

Glu Mobile seems to have lost momentum in the top grossing charts, which does not bode well for the near-term outlook for the beaten-down stock. We still believe Glu Mobile will benefit from the growing app market but would stay away from the share for the time being. There are simply better alternatives out there, not the least our top-pick G5 Entertainment, which showed a stable ranking development. For a small company in this fastly growing market, this has to be seen as a great success. Also, it is important to highlight that G5 Entertainment, together with Glu Mobile, is the only 100% pure play on the mobile gaming market that is publicly traded. For long-term investors with a lot of patience, Glu Mobile continues to be an interesting opportunity to participate from the fast growth in mobile gaming, in our opinion.

For a more detailed comment, please see:


Published October 9th, 2012:

Long Glu Mobile

Ticker: GLUU;;

Mobile gaming company Glu Mobile is currently trading down some 18%. That is AFTER the share declined some 10% during last week’s trading.

The weak share price performance seems once again triggered by disappointing comments from Zynga, similar to what happened ahead of Q2 2012. Zynga’s CEO Mark Pincus said last Thursday: “We are lowering our outlook to reflect delays in launching new games, a faster decline in existing web games due in part to a more challenging environment on the Facebook web platform, and reduced expectations for Draw Something.”

While both Zynga and Glu Mobile are making games, there is a huge difference: Zynga has more than 90% of its revenues coming from Facebook while Glu Mobile is 100% exposed to mobile gaming, i.e. smartphones and tablets.

We see this as a great entry opportunity into Glu Mobile and its great exposure towards mobile gaming. Remember, Glu Mobile is together with our top-pick G5 Entertainment, the only publicly traded 100% play on the mobile gaming market. Both companies develop and publish apps for smartphones and tablets and enjoy stellar growth.

Looking at the recent download statistics for Glu Mobile games among the top grossing charts around the world (see ranking check below), we note that Glu has lost some traction in recent weeks, however, still holding very good positions. It is also important to note, that the underlying market is constantly growing, so the lower rankings today do not necessarily mean lower revenues than e.g. 3 months ago. Glu Mobile’s gaming line-up into the all important holiday season looks impressive and we think at USD 3.30, the stock is very attractive. We also remind you that only a few weeks ago Glu Mobile’s CEO Niccolo de Masi was very bullish on how the iPhone 5 will affect his business in the important fourth quarter of the year. Said de Masi: “In Q4 2011, we came in 10 to 15% ahead of guidance because of the iPhone 4S release” and he added that he expects the iPhone 5 to have at least the same impact in Q4 this year and Q1 2013.

Number of Glu Mobile games among the top grossing charts for iOS:

(We are screening the app markets of Australia, Canada, China, France, Germany, Italy, Japan, Netherlands, Russia, South Korea, Spain, Sweden, UK and USA).



Published August 30th, 2012:

Long Bitzio

LogoIt has been a while since we pushed a trading idea at Nordic Investor. As a regular reader, you know that we are bullish on the app market and we recently came across a US micro-cap story which we believe is worth a closer look.

Ticker: BTZO.OTC

Number of shares outstanding: 57,231,252

The company and its story

Bitzio is a young US start-up company which has the ambition to become a leading mobile media and app development company focused on connecting fans of large entertainment and sports properties with the players, celebrities and teams they love. With the ”Bitzio Engine” incorporated in its apps, the company captures valuable user data and drives increased user monetization.

Bitzio’s strategy looks as follows: Rather than going the traditional way of building the app first and then hoping the audience will come, Bitzio tries to do it the other way around. The company licenses media rights of sports and entertainment properties with millions of existing fans and then it uses these rights to create mobile apps and web experiences for these existing fan bases. With its long standing relationships with some of the largest international sports clubs and entertainment properties in the world, Bitzio has good prerequisites to acquire rights and licenses to use teams, logos and players in its apps. Once a relationship within the targeted verticals is established, Bitzio develops and deploys a suite of apps centered around a sports figure, team or celebrity and market to those fans who already have substantial interest. When a fan has downloaded one of their apps, Bitzio uses its behavioral analytics to cross sell and upsell other Bitzio apps to them. With each targeted celebrity, team or player, the company plans to deploy 15-25 targeted apps for each fan base with the goal to achieve higher than usual download metrics, revenue and customer lifetime value. Bitzio aims to generate revenues via 5 possible channels: download of apps, in-app sales of premium content, advertising, merchandising and finally sponsorship.


The company is built on a series of acquisitions beginning in 2011 with the takeover of Bitzio Corporation, a developer of mobile apps. Later on in the same year, Bitzio acquired Thinking Drones, and DigiSpace Solutions. Thinking Drones is a developer of iPhone and Android apps under the “Free the Apps” brand. Founded in 2009, Free the Apps has created many highly successful apps, including “Top 10″ overall apps featured in iTunes App Store. Their success is not only creating top revenue generating apps but also using that acumen to help other developers get the visibility their apps need in the crowded mobile apps space. Using proven strategies, Free the Apps provides developers with social and online solutions to get their apps in a “top” list and extend their reach to extensive customer base. With almost 40 million downloads and counting, some of Free the Apps successful free apps includes Convert Units for Free and Crop for Free. It is, however, our understanding that the main focus in the future will be on developing own apps, rather than providing other developers with development tools.

In 2012, the company went on to acquire Germany software and mobile app technology developer ACT Smartware, mobile game developer Knuckle Face and Motion Pixel Corporation (MPC). MPC is expected to further open up doors to sports teams and other affinity groups that have strong interests in mobile applications to enhance brand names and reach consumers. In the deals completed so far, Bitzio has managed to retain key personnel which seems essential for Bitzio’s strategy.

Recent developments:

In 2011, Bitzio reported total revenues of USD 579,386 of which all was recorded in the final quarter. In its recently reported H1 2012 results, the company recorded revenues of USD almost USD 1m, of which roughly 60% came from the developer tools and 40% from mobile apps. The net less of around USD 6.6m, included a one-off goodwill write-down following two of Bitzio’s latest acquisitions of in total USD 4m. Given the fact that Bitzio has so far been almost exclusively in a developing phase with only limited operations, this seems not overly alarming. At the end of Q2 2012, Bitzio had cash available of USD 55,637. Based on current revenues, cash on hand and a current net monthly burn rate of roughly USD 165,000, Bitzio will need to continue to raise money from the sales of securities to fund operations. 

In mid-August, Bitzio released its first app according to the new strategy in a cooperation with former Colombian soccer player Carlos Valderrama, known as “El Pibe” (“The Kid”). With his signature blond, permed hair, Valderrama was one of the most colorful soccer players in the 1990s. He was a member of the Colombian national team in the 1990s and between 1985 and 1998 he represented his country in 111 full internationals and scored 11 times, making him the most capped player in the country’s history. In 2004, Valderrama was included in the FIFA 100, a list of “greatest living footballers” chosen by soccer legend Pele to celebrate the 100th anniversary of FIFA. On you can have a look at the plans Bitzio has with this franchise. So far a simple dribbling and goal keeping game has been published under the “El Pibe” name and several other apps are in the pipeline. The iPhone app can be downloaded for free at Elsewhere, in early August, Bitzio signed a cooperation agreement with ROAR, one of Hollywood’s most successful talent management companies to team up to finance the development and launch of apps for some of the world’s most popular entertainment properties and talent, including actors, celebrities, musicians and professional athletes. At this point, no names of the potential celebrities were announced.

Why buy now?

Trading currently around USD 0,20, Bitzio is of course an absolute micro-cap and high risk story. The current market cap is a mere USD 11m. At this point, we think it is far too early to predict potential revenue or even earnings development for the company. However, we are impressed by management’s consistent implementation of its strategy. A lot of puzzle pieces seem in place and Bitzio has started to publish it first app within this strategy a few days ago. We think it is highly likely that more will follow and while we cannot assess their revenue potential at this point, we expect increased attention for the case the more apps will be released. US equity research boutique NBT Equity Research tries to value Bitzio using a “value per user” approach. They put a value of USD 10 per user on a targeted user base of 100m users by 2014 (at this point, Bitzio is beyond 40 million downloads and 10 millions users), implying a company value of USD 1bn. Needless to say that they are pretty bullish on the stock. I am not sure if I necessarily agree with this valuation approach as it is not 100% clear yet how these users will actually translate into earnings. Nevertheless, we are willing to give Bitzio the benefit of the doubt and anticipate positive newsflow over the coming months. The market for smartphones and tablets is poised to grow and so is the app market. We like the story and highlight Bitzio has a high risk trading Buy.



Published June 7th, 2012:

We are closing our long position in Ironroad, following a bumpy ride to say the least. The trade did not turn out the way we hoped and we decided to leave the story at SEK 7, 1% above the level we suggested the long-position in February. We considered Ironroad a high risk bet from the start and we think that profile has not changed. Today, the company announced that it proposes the de-listing from “Aktietorget”, as it has attracted US investors that want to invest in Ironroad, only if it is delisted. While we do not want to exclude that Ironroad will make a pleasant journey to become a profitable company we decide to take our cards of the table.


Published February 12th, 2012:

Long Ironroad

It’s time for a new trading idea. This time Nordic Investor goes long Sweden based Ironroad amid the company’s parallel listing in the USA and an upcoming roadshow of the CEO.

Who is Ironroad?

Ironroad started in 2006 and developed the so-called VMS (video message service) technology, which was launched in 2010. It is listed in Sweden at the Aktietorget stock exchange ( One year ago, Ironroad and VMS were present in three countries and 10 people were involved in the operations. Today, the service is available in 23 countries and Ironroad has about 100 employees, headquarter in Stockholm and local offices in Norway, Denmark, Germany, The Netherlands, Spain, Canada, India, Indonesia and the Philippines. VMS is distributed through subsidiaries and license holders. Its partners and clients are several global mobile operators and media companies, such as Tele2, 3 Hutchinson, TeliaSonera, Globe, Indosat and Telkomsel. The mobile video service VMS (Video Message Service) is addressed to individuals, mobile operators and service and content providers. VMS enables users to send and receive video messages through mobile phones. Through VMS Ironroad provides the mobile operators with a new revenue stream to complement a weaker revenue stream from voice calls. This cooperation builds long-term partnership. VMS also enables companies or organizations to achieve an easy and cost efficient way to distribute video content to its customers. The use of the applications are almost endless, such as management information to employees, content owners distributing video content to customers, sports clubs distributing information to supporters, advertising films, promos etc. Ironroad hopes that once users have grown attached to VMS from companies and organizations they will start sending VMS between each other. As the company expands its network of VMS partners abroad and connect its systems, users will be able to send VMS between countries without roaming fees. This will not only increase the user base but also make the market entrance level higher for competitors. For the consumer, VMS is a fun and quick way to share special moments and keep in touch. The app can be downloaded from the App Store or Android Market.

Ironroad’s strategy

Ironroad aims to collaborate with well known brands to market VMS, a strategy that has been successful, as the brand is now becoming more established in the various markets. Customer uptake was high just before the summer holidays and continued at an unabated pace during the autumn season. Efforts to establish new subsidiaries around the world continue, with local funding and local management. Ironroad has stated that within the next few weeks it will introduce another couple of new establishment of affiliates. In the Philippines and Indonesia, cooperation with each country’s largest mobile operators provides the launch of VMS great force. Also the licensees in the United States are making significant progress with an increasing number of celebrities and companies that want to market themselves using VMS. Less successful has it been for Ironroad’s partners in the Arab world, which, because of the political turmoil in the region, has fallen behind in the introduction of VMS. They aim to launch within the next few months. Ironroads’ sales still consists largely of licensing revenue since the establishment of VMS as a concept for consumers and businesses has been a priority. Management aims to continue to place great emphasis on the establishment of VMS as a brand, but focus on the sale will be moved from celebrities to more revenue generating customers who want to do direct marketing through video on the mobile. The company sees the time being right now, since it had successful campaigns, including K-rauta and Ticnet in the spring, while VMS as a concept is becoming more well known thanks to the PR from celebrities. For example, more than 3% of Sweden’s population now has received a VMS in their phone. The goal for 2011 was to reach 10%, which is considered to be a sign that a product is established in a market. The ambition to reach break-even during the fall on the Swedish and the Indonesian markets are still valid. VMS roll out in the United States is about half a year after Sweden.

Why buy now?

At Nordic Investor, we usually do not like companies that are not profitable. However, if the company is in a strong growth phase and the underlying market seems promising enough, we can make exceptions. We believe that going long Ironroad can be rewarding since the coming weeks are expected to be eventful. On January 27th, 2012, Ironroad’s CEO Magnus Kniving published a letter to his shareholders highlighting the current state of operations and giving a brief oversight of what’s to come in the near future: “VMS reaches out to one of the fastest growing markets for marketing. Overall, the global market for mobile marketing, a market which we have shown that we can take market share of with VMS, is expected to be worth up to SEK 130 billion by 2015. This implies a growth rate of more than 50% p.a. from current levels. Ironroad’s long-term goal is that on average 5000 users will follow every each of our broadcasters that use VMS. In those roundabout 20 countries where we have active broadcasters, the goal is to increase the number of broadcasters to 500 before the end of the year, i.e. to reach a total of around 10,000 broadcasters. The formula 20 countries x 500 broadcasters x 5000 followers (20x500x5000) was set at the end of 2010 in order to describe the company’s target and shows that the ultimate hope is to reach 50 million users of VMS. During the last year, focus was put on the number of countries which showed good results and VMS is now used in more than 20 countries. The focus during 2012 will be on finding new broadcasters. Today, this type of company is valued high. Two examples are our competitors QIK and Soundcloud (companies that are similar to Ironroad), which both are valued at USD 40/user. QIK was sold for USD 150m to Skype and Soundcloud managed to raise venture capital at this high valuation. If the number of users of VMS continues to increase at current pace, we will have more than 1 million users before the end of this quarter. Using the same valuation principle, this would motivate a value of more that SEK 250 million for Ironroad. If that type of valuation metric for services like ours were to remain at these levels, this would imply a value of USD 2.5 billion for Ironrad if the company was to achieve its long-term goal of 50 million users. During recent weeks, we got the confirmation that we are on the right way with many large companies as customers of which some are testing VMS and others have just started to use VMS. In other words, there are big hopes for good future results. The company’s next big step forward will be the full fledged launch in the USA. The biggest reason for this are the significantly higher valuations there compared with Sweden. The Ironroad share will be parallel-listed in the USA during Q1 2012 which is likely to generate valuable attention for VMS. During Q1 2012, I will do a six week long roadshow with the intention to present our service and its functions to investors, equity sales people, fund managers and journalists. That valuations are higher in the USA is further shown by the fact that our licensee Ironroad USA issued new shares during the fall at a valuation of SEK 100m which is twice as high as we are valued ourselves.”


Ironroad is in the middle of a new share issue of up 1 987 623 shares at SEK 7 per share (compared with the current number of outstanding shares of 7 950 491 and a share price of SEK 6,90). The share issue is 95% guaranteed, which basically eliminates the risk of failure. With the proceed, Ironroad wants to improve its working capital, amortize a bridge loan of SEK 5m and finance its growth strategy of reaching out to new markets and develop VMS further. We believe it is hard to forecast when and if Ironroad will become a profitable company at this points. Therefore we see a position as a speculative trade rather than a long term investment. We expect positive and optimistic comments in connection with the Q4 2011 report that is pusblished on February 24th, 2012. The CEO’s roadshow should increase the awareness of investors for the case and the peer group valuation suggests strong upside potential, based on a USD/user approach. Following the share issue and at the current share price, Ironroad has a market cap of SEK 68.6m. Using the USD 40 / user valuation of its peers, Ironroad should be worth around SEK 272m, or around SEK 27 per share. This would be an upside of almost 300% to current levels. The upcoming parallel-listing in the USA should attract new investors and strengthen the company’s position in the USA in general. This is a high risk trade but we think it can be a highly profitable one as well.

Nordic Investor

February 9th, 2012:

We are closing our Trading Idea: Long Glu Mobile ahead of Q4, which we initiated on January 23rd. Since then the share has increased from USD 2.87 to USD 4.40 today, an increase of 53%. While we do not exclude that the Glu Mobile share has more to give, we are quite happy with the recent performance and decide to take profits. In the mobile gaming space we do prefer our top-pick G5 Entertainment which, unlike Glu Mobile, is already highly profitable and trading at a bargain valuation, including a 12 months forward PE-ratio of 14x.

Nordic Investor


Published on January 23rd, 2012

Long Glu Mobile ahead of Q4 2011 report

Being one of the few listed peers of our top pick G5 Entertainment, we have followed Glu Mobile for quite some time. Based in the US, Glu Mobile is one of the leading developers and publishers of mobile games for smartphones and tablets, supporting iOS, Android, Windows Phone, Google Chrome and more. Founded in 2001, Glu is headquartered in San Francisco and has major offices in Kirkland, Washington, Brazil, Canada, China, Russia and the UK. Similar to G5, Glu has traditionally been focused on games for featurephones, before changing focus towards smarthpones during 2009. But unlike G5, Glu has been somewhat slower with its transformation and revenues from featurephone games are expected to still represent some 30% in Q4 2011. Furthermore, Glu has yet to make a profit on its efforts, the major reason why we fundamentally prefer G5 Entertainment. Nevertheless, things are developing into the right direction for Glu Mobile and it is naturally also benefitting from the underlying growth of the smartphone and tablet markets. Management’s targets a gross margin of 88% and an EBIT margin of 20-25%, which compares to a Q3 2011 gross margin of 66% and a loss on the EBIT line. In other words, still quite a walk to go but as the higher margin smartphone business is growing fast, management expects to be cash flow positive by early 2013. The expected volume leverage should make it possible to reach the targeted EBIT margins and we believe that this will happen sooner rather than later; i.e. sometime towards the second half of 2012. For Q4 2011, the company has guided for revenues in the region of USD 16.5m and a LPS of around USD 0.11.

Why should one buy at this point?

We believe there are several reasons why the risk/reward ratio looks attractive:

1.) Following its peak close to USD 6.00 in July 2011, Glu Mobile was hit hard by the general market slump and a deflated hype around the highly anticipated Zynga IPO. Since September, the share has been traded in a range between USD 2.00 and USD 3.75 and is currently trading our USD 2.90. In other words, the share has been trading sideward during the last months.

2.) Christmas business has been extremely successful for the likes of Apple, Amazon and Samsung. Christmas Day only saw a massive 6.8m device activations (both iOS and Android), representing a 353% jump compared with tha average of the days prior to Christmas in December. iOS and Android app downloads on December 25 soared by 125%. Also comments from G5 Entertainment’s management suggest that the Christmas business was a success for app developers.

3.) That this should be applicable also for Glu Mobile becomes apparent when looking at the grossing ranking of Glu Mobile games as provided by We have screened several of Glu Mobile’s top-sellers such as Stardom: The A-List, Blood & Glory, Contract Killer: Zombies, Frontline Commando and more and noted that the rankings were consistently high in all major markets for both iPhone and iPad. So far Glu Mobile has not commented on its Christmas business and we expect this to be a major positive driver at the Q4 2011 result presentation on February 7th 2012.

4.) Insider buying: One of Glu Mobile’s directors has recently bought 68945 shares at a cost of USD 3,00 each. Before his latest buy, the same director bought Glu Mobile shares on two other occasions during the past twelve months for a total cost of USD 1.89m at an average of USD 3,00. We certainly like to see management commitment and confident in their own story.

Nordic Investor

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