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Technology Stocks : THQ,Inc. (THQI)
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To: StaggerLee who wrote (2618)12/17/1997 10:50:00 AM
From: Sigmund  Read Replies (1) of 14266
 
Time to go long?

You make the point that any cash squeeze would be limited to Christmas next year. There are many ways to finance receivables short of selling more stock.

Any detailed cash flow analysis would have to be done by month and take into account the timing of paying royalties. What is the time differential between paying royalties and collecting receivables?
The other thing that is very important is the cash requirement for internal development of games. I assume that part of the rationale behind this year's stock offering was the funding of internal development. If Heliotrope is considered as being key to future expansion than this might require additional financing. If carefully considered and a correct decision, that is a plus not a minus. Even this might be handled in ways other than offering more THQI stock i.e. by selling stock or an interest in Heliotrope.

I'm not too worried about the cash requirements of growth and success. It is a nice problem to have.
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