THQ,Inc. (THQI) Message Board

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Technology Stocks : THQ,Inc. (THQI)

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To: Bleeker who wrote (7305)	7/28/1998 4:19:00 PM
From: Ron Harvey	of 14266

<< One thing we do know is that issuing bonds has a cost: approximately $3 million in interest payments a year.>> Because of THQI's junk bond status, the payments could well exceed that. Moreover, the dilution will probably be close to 3.5MM shares, and future earnings will be declared on a diluted basis. So it doesn't matter when the debt is exchanged for stock. Meanwhile, there'll be a lot of debenture holders who'll hedge their bet by selling short stock against the equity convertibility. That's a lot of potential selling pressure in the wings. The indenture will probably have convertibility restrictions, but investors typically flout them by doing their hedging on the Toronto exchange.

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