Ron, I'm not sure the $70 target for December is a total sugarplum fantasy. It's the same as the stock doubling from last August to December. ($9.50 to $23, actually.) If one would have said last August that THQ would do a dollar eps in 1997 and thus reach 25 based on the traditional 25 PE would that have been the kiss of death? All I'm saying is that $50, $60, and even $70 are not as outrageous as they might seem. Especially if the stock splits soon.
I've also been thinking about your "who're the buyers who'll push the price higher?" comment. I can think of a few areas of worry that can be eliminated by the subsequent earnings press release and conference call. This could cause current holders to add shares in anticipation of a much higher price by Christmas and bring in people who are on the sidelines. For instance, some are worried about Microprose. Some are worried about the GameFX charge being misinterpreted. Many (as I read it) are worried that THQI will collapse after trading starts, gap-up notwithstanding. Also, I would imagine that as we get near to some analyst price targets, people are nervous. If GKM or FS targets are only $36 or $38 (something like that) they either have to be raised, or the houses will downgrade THQ based on valuation.
Now, some investors will want to wait and see what is going on and then make their move. The institutions and momentum players came buying in waves in February, but not until the conference call. Ie, they were waiting to see what happened first.
Best,
Marc |
