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Technology Stocks : THQ,Inc. (THQI)
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To: Kory who wrote (8549)11/13/1998 4:41:00 PM
From: shotz  Read Replies (2) of 14266
 
Hola,

>> For example, assume THQ and JAKKS combine to sell $100 million
>> in video game revenue. THQ's cost is 50 millions and JAKKS is
>> 30 million. The joint venture would thus generate a profit of
>> 20 million, of which THQ will record their $100 million (1/20) ...

This is clearly not equitable -- which is why i continue to be
uncertain (a) whether it is the case, and/or (b) why BF would
make such an arrangement.

Consider a simple risk-reward analysis:
THQ risks 50 million to make 10 million (while JAKKS only risks 30M)?
... and if they should (on the off chance) produce a "stinker" game,
THQI has more to lose.

Did THQ's CFO buy into this willingly ;-)

cheers,
steve (long on THQ, but still confused)
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