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

To: Andrew C.R. Biddle who wrote (10865)	5/17/1999 8:12:00 PM
From: Quad Sevens	Read Replies (2) \| Respond to of 14266

OT Let me just make a comment on Pokemon, since it is at the top of the rankings Andrew provided. Each of the Poke gameboys is selling more, in units, than any other video game! Pokemon is a huge phenom, and it shows no signs of letting up. The best way to play this craze is through KIDE. (Warning: I have a position in KIDE). KIDE is the exclusive licensing agency for Pokemon merchandise outside of Asia. (KIDE is also the exclusive licensing agency for WCW merchandise, so KIDE has 2 giant trends in its favor, one at its peak [WCW], and one just starting to feel its oats [Pokemon].) Today KIDE reported great earnings per share for Q1: 13 cents vs 5 cents last year. If that kind of growth persists, KIDE is selling at just 15 times this year's earnings. biz.yahoo.com Do your own DD; I'm not recommending you buy it. Just thought I would write a little something on KIDE for my friends here in THQ land. PS: KIDE will broadcast its quarterly earnings conference call on Tuesday, May 18, 1999 at 2:00 PM EDT over Vcall.

To: Andrew C.R. Biddle who wrote (10865)	5/18/1999 2:12:00 AM
From: Marc Newman	Respond to of 14266

From Rick, who was able to spend time with THQ honchos-- Well, my report will not be too much like the ones in the past. I was surprised at how disinterested I was in the vast majority of what was going on. I actually had the best time at THQ's private party. Many thanks to Homeiv for having the ignorance to think he could just ask some exhibit staffer for them and have a chance of getting not one but FIVE!! The party featured martinis and handrolled (while you wait) cigars. Plenty of gourmet pizza, Mexican and southwest food and unlimited beer at the full hosted bar. But the highlight was the people we met. Michael (homeiv) and I shared a table for a while with the producer of the BASS game coming out. He like our ideas to make the game more popular -- Allow the fish to fight back (throw in some spiky sailfish), taking out your fellow boat-mates, put clubs on the deck to beat your prey into submission, power-ups for the fishermen like pistols and shotguns. He even came up with his own, a version called Redneck BASS Fishin', where you can use dynamite. He didn't think any of these suggestions would make it into future games. I also shares a table for a while with Mr. Ryno, the creative director. He asked me why the stock was trading at a multiple of 10x earnings. I told him "Because your boss is doing everything possible to keep it down." (just kidding) We must have spent more than 30 minutes talking to a combination of Farrell, Gysi and their head lawyer at Sidley & Somebody. The following is a point by point run-down of that marathon session: 1. Options. One reason they need to ask for options already is that the employee count has gone up by double in the past year. This made a lot of sense to me. Can't expect the number requested to not grow. The Don Traeger options, in case anyone was wondering, are not included in the amount asked for even though he will become an employee. They fall under the purchase price. PPL has their own option plan which for the moment has been adopted under the pooling of interests arrangement. Someone else posted that they asked for a number of options that was recommended by an outside company. Unless someone here is willing to call up all the other video game companies and compare, I guess they have some basis for what they're doing. By the way, they think that it's hilarious how some people here have posted that they are somehow purposely keeping the stock price down. 2. Rugrats and other Children's Games. Gysi said we may be announcing a new game that appeals to the same demographic as Rugrats. This could be really big if it comes in the next few months, making our presence very solid with that group. Maybe Pinky and the Brain or some other Warner Bros. or Dreamworks project? I believe the only market Rugrats is not currently in is the Netherlands. Of course, they are very pleased with it and are confident of the success of the N64 game. 3. MTV. I did not get anything substantive out of them on this deal. I mentioned in no uncertain terms that people will remain skeptical about it until they actually mention a single Extreme Sport that may be featured. I suggested aerial snowboarding and he said something like that was possible. But management is thrilled about it. Gys said that the mere fact that it's MTV is what is more important than anything else. All they have to do is think of something to make and the license will sell itself. they can't believe people don't see that right away. Well, I don't either so we'll have to wait and see. 4. Motocross. I don't know anything about this sport but I believe Sean McGowan must be a huge fan because he thinks it's just the greatest, or so I was told. I guess if he's as well known as McGrath (never heard of him myself) then why shouldn't we sell as many as that game does? Or at least split the pie evenly. 5. Farrell, generally. He was pleased with the expansion of THQ's branded franchises. I mentioned to him that I noticed how excited he has been about the year 2000 for the company. He is also happy about how many Color Gameboy games they're putting out now that there are 5 million units out there. He likes the PPL deal, of course, particularly because of the rave reviews Traeger's work is getting. I'm actually surprised how good a response the EA ports have goten from reviewers. I share the sentiment that they didn't look so hot, not like what we've heard about them. 6. Acquisitions. I told Kenneth Levin, their lawyer, that after spending almost $25 million in the past couple of years( while we were talking about options), all we've gotten so far is Pax Imperia. He took exception to my numbers and assessment at first but then figured I was close. He responded that you always have to be willing to take a chance and that we pay these people to take those chances. I responded that THQ was going to have to "Show us the money" when it comes to these acquisitions. Heliotrope was a waste, GameFX has not released a game in 12 months and PPL is still working on two games that were scheduled for release 9 months ago. See what I mean? So we're still in wait and see mode there. However, I am pretty pleased at some of the ancillary stuff we've received with the last two purchases. I love Rushware. That was pure genius. A pox on the Street for not rewarding THQ for that move. We have Star Wars, for Pete's sake. We also have Michael Owen Soccer for release on almost all platforms (maybe all). That's huge in Europe!! I am also pleased with the fact that we will receive some royalty money and maybe even praise for PPL's Jet Moto 3 that they're doing for 989 Studios. That's nothing to sniff at. And we save all that royalty money we would have paid to PPL and the distribution fees we would have paid to Rushware. 7. Analysts. I met our new analyst with Morgan Keegan. I think they're based in Tennessee. He didn't have anymore business cards and I don't remember his name. But he was joking with Gysi that he was going to expect $3 per shares this year. Fred did not enjoy hearing that. He said "our internal projections don't call for those numbers." I told him I knew lots of guys who would be glad to tutor his underlings in the art of projections! They talked to Bear Stearns again and someone else. Michael, maybe you remember, was it JP Morgan? In summary: I may write some more later but I agree with some who have said on the various threads that THQ's display was not that exciting and frankly the games were not too exciting to me. I enjoyed Sinistar to some extent (I have to work on maneuvering better) but there was not much going on as far as action most of the time. The original Sinistar was more intense. Injecting a 3D 360 degree universe into it makes for endless journeys into virtually empty space. It lacks the intensity of Rebel Assault and the new Star Wars Arcade game that came out last month or two. there are better shooters. As I already said, I was not overly impressed with the PPL games. But this is not what's important!!!!!! I'll tell you what I did see. I saw two huge years coming right up on a silver platter. I didn't look at Rugrats 'cause I don't know a thing about it. WWF was not even there. Star Wars was nowhere to be seen, Danger girl ...NADA. These are the big games of the year. And they were mostly not there. But I know they're coming and those PPL games will sell a million combined easy.