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

To: Richard G. Woodland who wrote (8663)	11/21/1998 11:58:00 AM
From: Sigmund	Respond to of 14266

<<< How could anyone be concerned with losing the WCW license? <<< I think you are right on target. Losing the WCW was a disaster for THQI. If they still had WCW this stock would have split three for one rather than 1.5 to 1 and the split stock might be at today's price. I also think you are correct that this is a good stock to short. If the stock goes to $40 in mid January, I think it will be a good short re concern setting in with respect to the loss of WCW and the slow start of WWF and the only half interest in WWF. It will be an even better short if the price is much above $40 in mid-January. The question I would ask you however is will you have the guts to continue to stay short as the price moves into the $40's? To make the question far less personal, do you think the shorts will hold on as the price moves to and into the $40's. Finally what would be wrong with a strategy of being long into the $40's and then closing a long position or even going short at that time?

To: Richard G. Woodland who wrote (8663)	11/21/1998 4:39:00 PM
From: OGM	Read Replies (1) \| Respond to of 14266

"While doing my hourly channel checks, I spoke to group of 12 year olds outside of Toys R Us. " I think we should all bow to Richard too. This kind of scuttlebutt is so valuable. Regarding previous post on the market and the stock value, it really depends on what your time-line looks like, but if you take a 5-10 year outlook (which is my approach when dealing with established industries and solid management, since I don't like to try to call markets and I don't speculate) it's looking more and more like this stock is incredibly cheap. I did a DCF for the stock, based on a current price of 25, a growth rate of 20% year over year for the next 15 years (not too conservative, but not too aggressive in my view based on their management, ROE, and focus on creating game franchises), a current EPS of .99, a future p/e of 20, and a yearly discount rate of 10%. With those assumptions (all of which you could challenge, especially in this sector), the cash flows have a present value of $95/share. I realize this is perhaps a crazy way to approach a stock in this sector, but again, I'm a long-termer when it comes to companies like this. To do a quick valuation based on PEG, this company has a 1-year growth rate of 246% and a P/E of 20. Thier ROE is 50% (which if you could use as a proxy for growth rate, since it approximates -- at least over a long term -- the rate the company is growing the equity base). $36 (from the Smart Money article) in 12 mos seems way more than reasonable to me. Having said this, I'm a bottom-fisher. All I want for Christmas is THQI at $15 and a promise from BF that he'll never quit. -OGM