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WPO: Time Is On Our Side – Thoughts from WPO’s 2011 Shareholder Day

September 13th, 2011

On Friday, WPO management hosted its bi-annual shareholder day.  If ever we had any doubts about our long term secular short case for WPO shares, they were all but removed following a series of management presentations.  Based on the tenor and...

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WWE: Time to Muscle Up; Getting Long with $16 Price Target

August 3rd, 2011

There are few franchises in the broader entertainment industry that have achieved the type of enduring resonance with consumers as the WWE has.  For more than three decades now the company has developed a universe of characters that continues to capture the...

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THQI: Asymmetric Return Potential Remains High; Catalysts Aren’t THAT Far Off

July 28th, 2011

In our preview of THQI’s 1Q12 earnings results we wondered aloud as to when the “summer of discontent” for shareholders would come to an end.  Well it appears based on the company’s 1Q12 results, revised outlook for FY12, and stock...

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THQI: When Will the Summer of Discontent for THQI’s Shareholders Come to an End? 1Q12 Preview

July 25th, 2011

The summer of discontent for THQI shareholders has admittedly lasted far longer than we could have ever imagined. Shares now trade at 1.0x book value and a meager 10.0x CONSENSUS estimates for FY12, both of which represent...

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THQI: E3 Post View, Evaluating THQI’s Digital Strategy While We Wait for Space Marine and Saints Row

June 15th, 2011

In the 7 trading days since the start of the annual E3 video game convention, THQI shares have declined 16%.  The E3 convention has historically served as an opportunity for video game developers and publishers to...

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THQI: The Setup

May 4th, 2011

In many respects, THQI’s 4Q11 earnings report and subsequent conference call was everything longs could have hoped for: The company reported EPS upside (even though revs were slightly below consensus) Quarter ending cash was higher than expectations Homefront has achieved profitability The...

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THQI: What Do We Know?

May 2nd, 2011

In the six weeks ago since we penned a report entitled: “Homefront’s a Hit, the EPS Implications” we have been asking ourselves the same question over and over (and perhaps many of our clients have been saying the same thing) – What do we know? The 30% decline in THQI’s shares over the...

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THQI: Homefront’s a Hit, the EPS Implications

March 14th, 2011

As long time followers of PAA Research know, we have been recommending the shares of THQI for quite some time now.  Over the past three years, THQI has transformed itself from a company almost entirely focused on the publication of video games based on key licenses in...

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THQI: Evaluating a Potentially Massive March

March 6th, 2011

THQI shares have declined 9.7% compared to a 1.3% gain for the S&P 500 since the company reported 3Q11 results and lowered its 4Q11 guidance. We were as perplexed as everyone else about the company’s decision to lower 4Q11 guidance a few weeks prior to what could...

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OPEN: The “TAM” Fallacy and the Implications of a Solution without a Problem – Time to Get Short

March 2nd, 2011

Let’s get this out of the way early on – we are firm believers in the concept that valuation is not a short thesis, or more simply stated valuation is not a thesis.  Ask any hedge fund manager who has relied on...

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WPO: The Long Retrenchment At Kaplan Begins, Assessing WPO’s Earnings Power Going Forward

February 24th, 2011

Approximately 18-months ago, we scribed a letter to Warren Buffet, Chairman and CEO of Berkshire Hathaway about his sizeable ownership stake in the Washington Post Company. It might have been an audacious endeavor on our part...

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THQI: Solid 3Q11 Offset by “Sandbagged” 4Q11 Guidance; Concerns About Kids Movie Based Licenses Unfounded

February 3rd, 2011

THQI reported 3Q11 earnings results after the close yesterday.  You can read the full earnings release here.  The headlines are that the company beat consensus expectations for the December quarter, but...

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THQI: Our Title by Title Based Estimates for 3Q11 and 4Q11, Key Issues for THQI Management to Address Surrounding...

February 2nd, 2011

THQI will report 3Q11 earnings after the close on Wednesday February 2nd.  Since the release of THQI’s drawing based peripheral for the Wii on November 14th (uDraw), the stock has rallied 41%. ...

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THQI: Re-Evaluating the Value of the "uDraw Ecosystem", Dialing in on THQI's Monster CY11

January 6th, 2011

At the depths of the summer swoon and what proved to be the nadir for THQI shares, we issued a report entitled "THQI: The Waiting Has Been the Hardest Part, Finally Some Catalysts for THQI".  It was late August and THQI shares...

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WPO: FL Judge Rules on Motion to Dismiss in 1 of 3 Qui Tams, Tail Risk Continues to Grow

December 22nd, 2010

For several months now, we have been waiting for an update on the status of three separate qui tam actions outstanding against Kaplan Higher Education in the United States District Court Southern District of Florida.  ...

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WPO: More Than One Qui Tam Will Go Forward, "Tail Risk" Continues to Grow

November 10th, 2010

Approximately two and a half months ago, we published a report that argued that the tail risk associated with owning WPO shares continued to increase.  Today we received further evidence that "tail risk" continues to grow for the company.Filing...

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WPO: 3Q10 Revenue and EPS Upside Should Be Overshadowed By Rapid Deterioration in Key Operating Metrics

November 5th, 2010

Admittedly, WPO's headline earnings results for 3Q10 appear to be compelling. The company reported total revenues of $1.189 billion and adjusted EPS from continuing operations of $11.40.  This compares to our...

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KNOT: 3Q10 Revenue Shortfall Belies Significant Topline Acceleration Heading Into 4Q10, 2011

November 4th, 2010

Approximately 5-months ago we introduced KNOT as a long investment idea.  At that time our primary thesis was as follows: KNOT still has leading media and ecommerce franchises serving large end-markets. The company has just...

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WPO: See You at the Crossroads, 17 Questions Heading into 3Q10 Earnings

November 3rd, 2010

On Friday, November 5th, WPO will report 3Q10 earnings.  WPO is at a significant crossroads.  Fundamental demand for the company's primary growth vehicle over the past five years has changed abruptly at a time when secular headwinds facing WPO's...

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THQI: The Waiting Has Been the Hardest Part, Finally Some Catalysts for THQI

August 31st, 2010

THQI's "summer of discontent" appears it could finally be coming to a close.  Since Memorial Day, THQI shares have lost close to 40% in value. THQI shares now trade below book value and appear to discount a scenario in which the company...

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WPO: Barron's Strikes Again, A More Realistic SOTP Analysis, Tail Risk Growing Rapidly

August 23rd, 2010

Barron's columnist Andrew Bary published a follow up piece this weekend to his initial write-up on WPO in which he argued that the stock could be worth as much as $900/share.  You can read the original article here.  Mr. Bary's...

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KNOT: Too Cheap "KNOT" To Own

June 21st, 2010

At a time when the US housing market remains in recession (and by proxy the US economy), the benefits of global monetary and fiscal stimulus have started to fade away, and sovereign debt fears cast a long shadow, we have focused on identifying long ideas that are US based companies that...

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Impressive CY11 Title Slate Should Overshadow UFC Disappointment

June 16th, 2010

Earlier this evening THQI hosted its investor presentation at this year's E3 Expo.  The company's presentation focused on its impressive core gamer title slate for CY11. Think about it this way: THQI spent almost an hour discussing more than a dozen...

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THQI: Strong Reviews, Expansion of Midnight Event at Gamestop Bode Well for Sell Through for UFC Undisputed 2010

May 24th, 2010

THQI will release one of its key titles for FY11 tomorrow, UFC Undisputed 2010.  Expectations among gamers, MMA fans, and investors is high following the strong sell through for UFC Undisputed 2009 and...

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WPO: 1Q10 Results Do Little To Change Our Short Thesis, Our Revised Estimates

May 10th, 2010

WPO reported 1Q10 results on 5/7.  Overall, the results did little to alter our short thesis on the stock.  The company beat our estimates on the topline but fell short of our EPS forecast due to lower than expected profitability at the...

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THQI's 4Q10 Results and Guidance Come In as We Expected, CY11 Could Bring $1.2B+ Revs, $1.00+ EPS

May 6th, 2010

THQI reported 4Q10 results after the close and provided initial guidance for 1Q11 and FY11.  You can read the company's earnings release here.  The earnings results and initial guidance provided by management were inline...

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THQI's Baseline Profitability Now Proven, the Focus Turns to Earnings and Cash Flow Growth for FY11 and FY12 - Just...

April 15th, 2010

THQI spent the better part of FY08 and FY09 streamlining its studio system, reducing headcount company-wide, and altering its project development process.  It was an arduous, painful process...

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One Week After Launch, Sell Through Indicators for Darksiders Suggest Potential Upside to Our Previous Estimates

March 12th, 2010

This report was originally published on 1/13/10.Approximately 2-weeks ago we published a report highlighting our positive expectations for Darksiders, THQI (6.5 ↓0.31%)’s second major launch of owned...

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Darksiders Looks to be Another Highly Rated, Internally Developed, Owned IP for THQI – Outlook For Shares...

March 12th, 2010

This report was originally published 12/31/09.In our original report on THQI (6.5 ↓0.31%), we argued that FY10 would represent the company’s transition from a pure “kids” and “licensed”...

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Dear Mr. Buffet: About the Washington Post Company….

March 10th, 2010

This report was originally published on September 15th, 2009.Please note, the following is a letter PAA Research recently sent to Warren Buffet, Chairman and CEO of Berkshire  Hathaway, Inc.. We thought our readers might find the analysis of Washington Post and...

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EXPI

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HUSQ.B

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