Although it could be risky, THQI could announce a 2:1 split right now. They could state simultaneously that they expect to beat Q1 and 1999 estimates, and that they initiate a share repurchase program. If companies are confident that they will have a higher stock price in the future, they may announce a split, even when the stock price is low. The downside is that Wall Street may not be impressed, and the split will leave the stock trading at $10. The upside is that Wall Street wakes up, realizes that THQ is being underestimated, and bids the stock up to $30+ before the actual split takes place.
I am a believer in the market maker conspiracy theory-- The MM's are embarrassed by THQ's consistent trouncing of their estimates. And they, in response, short the stock into the ground, as a passive-aggressive way of dealing with their bruised egos. Of course, at the same time, these duplicitous fiends holler "STRONG BUY!" With every month that passes, I become more convinced that THQ is listed on some mafia-run exchange. I think that THQ should consider moving to the NYSE. If not, then Farrell should consider being a bit more communicative with analysts, so that THQ beats estimates by only 10-15%, rather than 50%.
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Jeff's ideas about becoming the Nickelodeon video game company is a good idea. On the other hand, I don't imagine that "Doug" is anywhere nearly as popular as Rugrats.
I still insist that THQ must nail down 2 long-term blockbuster licenses this year, like WWF or Rugrats. Perhaps ESPN2 extreme sports.
Also, I feel that THQ needs to acquire some high-profile PC game developer. That would solve the lack of PC titles, while giving THQ major content for other platforms.
Also, they should continue to add skilled programmers and artists to their GameFX teams (this is something that they've done well so far). It would be nice if, in two years or so, GameFX is considered one of the top developers in the industry.
Todd |
