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Technology Stocks : THQ,Inc. (THQI)

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To: TNH who wrote (3840)3/11/1998 2:33:00 PM
From: Sigmund  Read Replies (1) of 14266
 
I too think the markets reaction is excessive, but there is an arithmetic factor here that can't be ignored. When you take 39% from 100% you have left 61% which must grow at 64% to get back to the original 100%. So if THQI grows their remaining business at 50% for two years in a row, the .61 would grow to 1.37 in the year 1999. The compounded annual growth rate for the two years 1999 compared to 1997 would be only 17%. So THQI really has its work cut out for Christmas 1999 to be significantly better than Christmas 1997.

They probably will pull it off, but the degree of apparent risk now is far greater than it seemed yesterday.
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