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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: TraderGreg who wrote (13345)	2/12/2000 1:33:00 PM
From: Sigmund	Respond to of 14266

<<< Does that sound overvalued to you? <<<< Not the point. Obviously If I thought THQI was overvalued at this price I wouldn't be long. And the exact growth rate isn't the main point either. I am trying to address the validity of the business model going forward. Thinking THQI can continue the current business model and just see growth rates tail off a bit might be valid or it might be head in sand thinking. That is the question I have raised....without offering an answer as I am not sure and think it is a difficult question to answer. Certainly BF has this on his mind. Remember when he tried to move away from the publishing model and was beefing up the internal game development capabilities. Remember the initiative to be a larger PC game supplier. So BF has tried two ways to modify the business model and was unsuccessful at both of these initiatives. The primary unmodified business model has worked well for THQI but has one actual problem and one potential problem. The actual problem is that game publishers get a lower PE than game developers. The potential problem relates to the ability to sustain this approach as THQI gets larger. Trying to sweep the issues under the table is not IMO a good way to deal with it. The detractors will not stop raising these issues and the institutions holding or thinking about buying THQI will certainly have these issues on their mind as they make their decisions. If the long-term trend is in doubt, the break or possible break or temporary break in the trend relates IMO to investors concern about the business model. That should serve as a wake up call. On a personal basis, I will probably maintain my current holdings independently of how I see the business model evolving because I think short-term I will be able to recoup a substantial part of the paper profits I had gotten accustomed to thinking of as money in the bank. The investment decision that I will be making relates to increasing my investment in THQI. There is a lot of money to be made in stocks right now and THQI has to compete for investors with a lot of other good opportunities such as Internet stocks, biomedical stocks, Japanese stocks etc. Being depressed and providing an opportunity for a rebound will not attract IMO new long-term investors and that is what is required.