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THQ (THQI -28%) continues to crater after withdrawing guidance, announcing game delays and a...

THQ (THQI -28%) continues to crater after withdrawing guidance, announcing game delays and a need for fresh capital, and generally putting its survival in doubt in the eyes of many. "The big question is, can it make it to next year?," MKM's Eric Handler asked recently. He noted THQ's cash balance has dropped by 50% since the beginning of FY13, and that it has already tapped $21M from its $50M credit line.
Comments (4)
  • J Mintzmyer
    , contributor
    Comments (3676) | Send Message
     
    Once again, I'm the only one seeing green here. Adding more shares- my basis is still slightly above $2 here. I think analysts really missed the fact that SR3 has sold over 5M copies. It's still selling for $30-$40 and will likely clear another 1M copies by next spring.

     

    I'm not sure what the spread retail margin is for SR3, but additional sales should be nearly pure profit.

     

    Darksiders 2 missed the breakeven goal of 2M, but with good reviews and 1.4M cleared, hope is not completely lost. Holiday and Wii U should help here.
    7 Nov 2012, 02:51 PM Reply Like
  • davidmthekidd
    , contributor
    Comments (4) | Send Message
     
    I can see $THQI at $5 by spring if they get their act together.
    8 Nov 2012, 01:17 AM Reply Like
  • BlasterMan
    , contributor
    Comments (27) | Send Message
     
    They specifically said they were dealing with the 100MM debt on the call. You better hope that doesn't mean a debt/equity swap or your shares will suddenly be worth 1/10 or 1/15 the current value. I can see them doing that then getting a new credit line. How else do they both deal with the debt and recapitalize the company?
    8 Nov 2012, 06:42 AM Reply Like
  • J Mintzmyer
    , contributor
    Comments (3676) | Send Message
     
    Blaster-- the debt is due August 2014. They say nothing about dealing with the debt now.

     

    "The new release timing and our limited financial resources have created a need for additional capital. And as you know, we also have $100 million of face value of convertible notes outstanding that are due in less than 2 years. In order to help us address these challenges, we have hired Centerview Partners to evaluate our strategic alternatives. We will discuss the results of that engagement at the appropriate time."

     

    I expect some big dilution, but the thrust of my article is that little to nothing is NEW. We all new DS2 was a disappointment and THQ's financial liquidity position has not worsened since May.
    8 Nov 2012, 09:10 AM Reply Like
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