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Technology Stocks : 3DO: Hot Games for Hot Machines (THDO) -- Ignore unavailable to you. Want to Upgrade?

To: (Bob) Zumbrunnen who wrote (4071)	11/24/2002 6:14:22 PM
From: EL KABONG!!!	Read Replies (2) \| Respond to of 4081

Hi Bob, Got a question for you and the rest of the thread... Up until now, I've never been an investor in any of the game stocks, like THDO, THQI, and ATVI or the boxmakers like MSFT or Nintendo. (So I'm in need of some insights from folks experienced in investing in the sector.) Recently, I've taken a real shine to Activision (ATVI) based almost solely upon their numbers. The stock is down considerably from its all time high, and the P/E is now respectable, though not dirt cheap. GPE (or PEG, if you prefer) is outstanding IMO. If future growth projections are even anywhere in the ballpark, then the stock is a screaming buy, maybe... <g> The stock is just starting to recover from the THQI projections, which cast a dark pall over the entire industry. (THQI is forecasting lower revenues, and a lowering growth rate for the industry because of lackluster sales of new Nintendos and/or Xboxes. THQI also recently lost their COO, who wants to "pursue other interests".) I think that THQI may be correct in their visions for their own sales, but I suspect that ATVI may well exceed expectations and firmly establish itself as the undisputed leader in independent game software. I sense that ATVI is a company that is going to take the bull by the horns, and turn the bad economy to their long term advantage. Just a hunch, but I think that they can and will pull it off... Just this past week, Activision announced a new SEC filing to acquire $500M in new funding (a combination of debt, preferred shares, common shares, warrants, etcetera). ATVI currently has only about 4M of debt, which makes them nearly debt-free from my perspective, so acquiring some higher debt is not extremely worrisome to me. So, my reasoning is the following: 1) If they're going to acquire long term debt, now is the time to do it, while interest rates at at all-time historical lows... 2) The BoD and the the ATVI executives wouldn't be expanding into the jaws of a moribund economy if they didn't have an excellent vision of their own future... 3) The most recent decline in the price of ATVI stock is more due to THQI's forecast rather than anything negative from ATVI... 4) The growth rates are humongous at ATVI, anywhere as low as 20% from the extremely pessimistic point of view to as high as 60% from the most optimistic viewpoint... I'm considering establishing a substantial position in ATVI, over time, perhaps as large as 10% to 20% of my total portfolio. (Stupid, I know, but sometimes I'm cocksure when I feel real strong about a particular stock.) What I'm looking for, is for one of you guys more experienced in investing in these game stocks to talk me out this (I'm crazy) or talk me into it (crazy like a fox)... <g> Thanks. KJC