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

To: Andrew C.R. Biddle who wrote (10597)	4/22/1999 3:10:00 PM
From: Todd D. Wiener	Read Replies (1) \| Respond to of 14266

The pooling vote has occurred: Accounting Rule Makers Vote to End Popular Poolings of Interest in Mergers By ELIZABETH MACDONALD Staff Reporter of THE WALL STREET JOURNAL U.S. accounting regulators voted unanimously to kill a popular bookkeeping method that has helped spur the recent surge in corporate mergers. The seven members of the Financial Accounting Standards Board endorsed eliminating so-called poolings of interest, an accounting method for all-stock mergers made popular in recent years by banking, high-tech and pharmaceutical companies. In a pooling, merging companies combine their balance sheets and avoid future earnings charges from goodwill, the premium companies pay over acquired net assets for things such as the value of brand names. Goodwill must be written off against profit for as long as 40 years, taking a bite out of annual earnings. At the same time, the FASB had considered but then opted against allowing pooling in limited cases-specifically, for deals that are truly a merger of equals. Instead, all merging companies would have to book their deals under an alternative method, so-called purchase accounting, which creates annual goodwill charges. The board voted to kill pooling in order to conform to international standards, which generally don't allow the method, and to create more comparable financial results among companies that have made acquisitions. The FASB plans to issue a proposal covering the change sometime in late July. If the board adopts the rule after the conclusion of a three- to four-month comment period, it would take effect for deals occurring after Jan. 1, 2001. The rule will not be retroactive. Wall Street expects a boom in merger activity up until the rule takes effect. But, if enacted, the change won't likely slow the pace of M&A deals because the need for companies to increase business through acquisitions should far outweigh the onerous effects of a rule change. Meanwhile, an increasing number of companies have been showcasing "cash" earnings over net income, because those figures, based on cash flow, don't include goodwill charges and thus make their financial performance look much better. The board expects to announce next month whether it will preserve the current 40-year write-off period for goodwill or cut that period to as little as 10 years for most merging companies. The FASB has received many letters opposing the change. Another possibility, considered a long shot, is an immediate, one-time writeoff for goodwill, which many companies would welcome. And in a related development, the FASB still plans to kill the instant write-off for the value of research and development picked up in an acquisition. Instead, companies would have to account for these costs as goodwill in a rule that could take effect Jan. 1, 2000. A growing number of merging companies, including Daimler Benz AG and Chrysler Corp. last year, have used pooling in recent years as their soaring shares have made such megadeals easier to complete. For the first time last year, the $852.9 billion total value for all pooling deals outstripped the $773.9 billion total for all purchase deals.

To: Andrew C.R. Biddle who wrote (10597)	4/22/1999 3:20:00 PM
From: Todd D. Wiener	Respond to of 14266

THQI at $25.31 has broken through the 100-day MA, as well as the resistance at $25. Assuming we can close at or above the current price, we will have confirmed the breakout. Current volume is 933,000 shares. The next stop could be $27-28, followed by a brief confirmation of the new support at $25 in the next week or so. After this happens, the stock should make a run at the old high of $32, as pre-E3 excitement builds. I'm in the process of modifying my 1999 estimates to the upside. I think that we can expect to see the sideliners buy in, the shorts cover, and the recent sellers buy back their shares, as investors realize that this time is different for the stock. Andrew- mergers are only bullish if we own the stocks being acquired ;o) Todd