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

To: Marc Newman who wrote (2896)	1/5/1998 10:51:00 PM
From: Todd D. Wiener	Read Replies (2) \| Respond to of 14266

The current "sell-off" is nothing more than tax-deferred selling. This was quite common today in stocks that had performed very well in Q4 and 1998. I think that THQI will have a near-tern bottom at $19.875 in a couple of days, and it will reach $27 sometime this month. Excluding any bad news (such as THQ missing my estimate of .70), we should see the low 30s in February. I don't expect a secondary offering. Someone mentioned that THQ could have used their credit line last year, but they opted to sell stock, instead. That's not really true. THQ did not have a favorable bank agreement last year. Although it was better than their previous relationship with BNY, the Imperial Bank credit line was not sufficient to support THQ's 1997 goals. A growing company should always choose to finance its growth with debt, rather than with equity. Last year, THQ may not have had a choice. For Q1, THQ's cash balances, the credit line, and the expected receivables from Q4 should provide plenty of liquidity for growth. For the rest of 1998, I suspect that THQ's operating cash flow should provide sufficient funding for its business activities. Also, I think that THQ will get another extension of its credit line. If we see a secondary offering at all, it would likely occur in Q2 or Q3. I would be disappointed if THQ pursues this route. Todd