A Secret Weapon Called Nintendoby
It sounds like a chemical formula, but THQ is a tiny toy company that Jack Friedman, formerly chairman of LJN Toys, formed in May, 1990. Except for some big investors who knew Friedman's background, no one paid much attention to the California company with the high-tech-sounding name. But THQ's stock has jumped from 3 1/2 a share to 5 3/32 in just three weeks. What's the scoop?
Nintendo, that's what. THQ is licensed to sell video-game cartridges for Nintendo in the U. S. and Canada. And it recently signed a licensing pact to develop and sell products for the Nintendo Entertainment System in Australia, Europe, and some cities in Asia. THQ's focus is developing games for the three Nintendo video-game formats: Nintendo Entertainment System, which is in about 30 million households; Game Boy, a hand-held game that has sold 5.7 million units in the U. S.; and Super NES, a big hit in Japan that is currently being introduced in the U. S.
"Based on conservative estimates, we see sales of $40 million this year and $80 million in 1992," says one New York money manager, who figures THQ will earn 55~ a share this year and 75~ in 1992. The stock, he says, could double in the next 12 months. The kicker, he adds, is that when it hits $100 million in sales, "the likes of Mattel will want to acquire it."