Wednesday, April 18, 2012

THQI - Short Squeeze Coming

I am very good at sniffing out stocks that are on the cusp of a short squeeze.  Back in December with FFN at $.51 and having an almost identical short ratio to THQI, I called for a short squeeze.  FFN went from $.51 to over $2.70 a share.  The shorts were squeezed, torched, burned, jumped on, left for dead... and to think if they only had read this blog.  Oh the money they would have saved.

With over 24% of the stock in the hand of short sellers THQI had tumbled down from almost $3 a share to $.46.  The short sellers were salivating.  They saw a bankruptcy coming,  a chance to make some very large profits.... and then suddenly today THQI releases news that brings the company and the stock back to life.  Short sellers hoping for a bankruptcy, they will either have to cover their short positions, or risk their capital as THQI rises back over $1.00. The Guru will be right again as I have written about THQI many times.  I was not expecting THQI to go up right away but I knew it would have its day, and that day is today.

THQI told the investment community, in my opinion, to cover your shorts, we are strong, we are growing, and the shorts who have us going bankrupt are wrong.  Ultimately I think THQI heads back over $1.  That is an important figure to maintain their listening requirements.

When I was young I played stick ball, basketball, rode my bicycle.  Kids these days play video games.  THQI is not going under it is growing as this fat country plays video games. 

THQI is going to outlast the vultures who have been shorting the stock for months now.  Payback is a bitch. I wouldn't be surprised if someone decided to step in and buy them out.   One thing is for sure,  the shorts have this stock wrong.  They will cover now or pay the price later, either way, in my view, those buying this stock at these prices will be sitting on some nice profits in the short term.  And that is what this blog is all about.  Making money.  If its at the expense of some over zealous short sellers, than so be it. I was right with FFN and I will be right about THQI.

Today's press release:

THQ Fiscal 2012 Fourth Quarter Results to Exceed Prior Expectations

Year-End Cash Balance of $76 Million Significantly Exceeds Prior Guidance

AGOURA HILLS, Calif., Apr 18, 2012 (BUSINESS WIRE) -- THQ Inc. (NASDAQ: THQI) today provided preliminary, unaudited financial results for the fourth quarter ended March 31, 2012. For the fourth quarter, THQ expects to report non-GAAP net sales of $160 million to $170 million, which is above the company's previous outlook of non-GAAP net sales in the range of $130 million to $150 million. Revised net sales expectations reflect:
-- continued strong net sales of the critically-acclaimed Saints Row(R): The Third(TM), which to date has shipped in more than four million units;
-- higher-than-expected digital sales, largely driven by the robust digital content of Saints Row: The Third; and
-- slightly higher-than-expected net sales of UFC(R) Undisputed(R) 3, which was released mid-February 2012 to highly-favorable critical reviews, achieving an average Metacritic score of 85.
The company currently expects a fiscal fourth quarter non-GAAP net loss per share in the range of $0.10 to $0.20, compared to its previous expectation of a net loss per share in the range of $0.35 to $0.50.
THQ expects to report cash and cash equivalents of approximately $76 million at March 31, 2012, three times higher than the previous expectation for its year-end cash balance, due to better-than-expected operating results in the fourth quarter, as well as earlier-than-anticipated cash receipts. Additionally, the company ended the quarter with no outstanding borrowings on its $50 million credit facility, and did not borrow against the facility during the quarter. The company expects to utilize a substantial portion of its cash and cash equivalents as well as its credit facility as it launches its slate for the 2013 fiscal year, beginning with Darksiders(R) II.
THQ's GAAP results for the fourth quarter ended March 31, 2012 are expected to include non-cash software development charges of approximately $30 million to $50 million resulting from decisions made related to the company's previously-announced product strategy.
THQ will report full GAAP and non-GAAP fiscal 2012 fourth quarter and full-year results, along with a reconciliation of those results, and provide its outlook for fiscal 2013 on Tuesday, May 15, 2012. Conference call details will be provided closer to the date.

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