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

To: Trippi who wrote (3968)	3/12/1998 5:11:00 PM
From: Tom Caruthers	Read Replies (1) \| Respond to of 14266

You guys don't get it! Please read the following: 1)Regardless of what the P/E is now, that is based on the past. This company has a big psychological overhang right now. Fact 1: THQI will take a 40% hit in earnings a year from now, regardless if their earnings increase over the next year. Why invest in a ticking time-bomb? 2) Yes it's true that we may eventually get to a price where THQI looks like a deal from a value point of view, but there is so MUCH uncertainty here. If THQI can prove that it has something else other than WCW that can be considered a consistent moneymaker, then value comes into play. But I will have to doubt that they will be able to do this unless they start investing heavily in R&D. Why doesn't anyone address this? I was wrong about my previous figure that I quoted for product development. I quoted $1.6 million in the quarter. I was wrong. It was $1.6 million for the ENTIRE YEAR!!!! It takes a couple of years and a lot of money (2-3 million on average) just to produce a game, be it mediocre or otherwise. I don't think THQI has been prepared for this at all, a failure in management from my point of view. And once they start investing into R&D, then their nice margins will go "POOF"! 3) Road Rash and Nuclear Strike will be the LAST titles that THQI ever gets from ERTS. Figure that into your decrease in earnings. Don't forget to figure another title in there as well...Madden NFL 98 for SNES. THQI won't get that again either. The damage has been done and the ERTS/THQI honeymoon is OVER! You could be seeing a 50%+ decrease in earnings on top of increased competition in N64 with ERTS coming in, on top of lost ERTS ports, on top of a likely series of bombs before THQI gets in a groove. PLUS, all of you are counting on WCW being a hit this year as well! Nitro was bad. WWF wrestling is out. WCW SALES FOR THIS YEAR ARE NOT A GUARANTEED THING!!!! Who knows? Maybe wrestling has already run its course, just like Street Fighter and Mortal combat did after the first 3 releases!!! Tom C.

To: Trippi who wrote (3968)	3/13/1998 10:59:00 AM
From: charles moore	Respond to of 14266

Apparently you are having problems reading. I never Faulted your Math and only mentioned my own. Then you try to Fault me my saying you dont understand by Post because of" this and that" and then you talk about "assuming that" so you are doing essentially the same thing as you try to accuse me of doing so lets try it in a "Dick and Jane" sort of scenario since you cant understand my other explanation. If I have a penny and I double it 8 times or 8 quarters I will end up with $1.28. If at this point I have a 40% loss or about .51 I will have .77. Are you trying to tell me that a 77 fold increase would not justify a hefty price as compared to a stock in the same industry that just plodded along with a total 50% increase over the same two years?Another important consideration is Management. What amazes me is the posts that declare Farrell a Genius and now want to act like he is an Idiot that ll of a sudden doesnt know what he is doing.How do you know if for instance Time Warner wanted double the Franchise Fee which changes the breakeven point and possibly very little profit or a loss?In short there are many factors that affect earning which in turn can affect the Price.It has also been mentioned that Analysts are rating THQI as a Toy stock si how do you know which P/E is correct? A perfect example is when people tried to compare Pepsi to Coke before Pepsi spun off its restaurants. You couldnt compare the two directly. In short you just cant pick a P/E number of say 25 and then assume the earnings should be such and such and so the price should be X.You have the tail wagging the dog instead of the dog wagging the tail. I am also long THQI having purchased at 6 1/2 and have mentioned it several times before but not for such a silly reason as PE. Charles