THQ,Inc. (THQI) Message Board

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Technology Stocks : THQ,Inc. (THQI)

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To: Jeff Lins who wrote (7424)	8/4/1998 7:30:00 PM
From: Todd D. Wiener	Read Replies (1) of 14266

Jeff- THQ could acquire Codemasters, a UK developer/publisher. THQ's international sales/marketing person used to work at Codemasters. I believe that THQ could afford the acquisition. Of course, I have no idea if there have been any talks. The stock has held up well because THQ has incredible earnings momentum. Although it's not getting the valuation it deserves, this should provide some suuport as the rest of the market crumbles. THQ is not likely to lose $1.00 in a quarter. Their business model is such that they can make money from most titles, even if the shipped volume is fairly low. As long as THQ ships new games each quarter, they should continue to be very profitable. The overall impact on THQ's gross margins will be slight, since Nintendo has reduced prices on the carts. Also, money which THQ used to spend on marketing WCW vs. NWO will now be spent by Nintendo, so the overall effect should be minimal. $20 million is not much over 10 years. In 10 years, THQ could have well over $1 billion in annual sales (perhaps $2 billion). $2 million per year (or the equivalent) isn't a lot, assuming WWF remains popular. Todd

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