THQ,Inc. (THQI) Message Board

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Technology Stocks : THQ,Inc. (THQI)

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To: rogermci® who wrote (10017)	3/1/1999 1:18:00 AM
From: Marc Newman	of 14266

Roger, I'm not sure if RADAF is a great example. It's a foreign company, for one. There could be a lot of reasons that it is trading below where the buyback occurred. We had an interesting discussion about a buyback on the MF board. There were plenty of examples where a buyback had poor results though it seems to me that larger companies get a lot of bang for the buyback buck. It's one of IBM's big weapons and helps DELL a lot too. I also note that once NOVL announced a huge buyback last year the stock almost doubled in less than half a year. I believe it was RRanney who made the great point that THQ would be getting a return of almost 10% on its money by buying back shares right now, compared to the 5% or so it is earning in interest. I find that a good business reason for buying them back. Especially if these shares are worth more as currency in the future. Now I think we all agree on a few things. If there was a buyback, THQ should only spend a few million dollars. Ie, don't dip into any money that could be used for licenses. And that they just buy the stock back "from time to time." That is, they authorize a certain size but don't necessarily really go after that many shares. As for Trippi's point about Farrell being right eventually to do the secondary, just because the stock went up many-fold afterwards ... I'm not so sure. They never seemed to use the cash. Was it really necessary? Or was that size necessary? It seems hard to argue that it wasn't at least a million shares too big. Imagine the eps if that million shares wasn't there. Then imagine what THQ would earn under Todd's estimate going forward. Marc

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