THQ Details Layoffs, CEO Pay Cut

THQ Details Layoffs, CEO Pay Cut

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THQ confirms that 240 non-studio jobs are being eliminated, while CEO Brian Farrell will take a single-year pay cut of 50 percent.

Details about the heavy layoffs hitting THQ, first reported in late January, have now come to light through an 8-K filing made to the U.S. Securities and Exchange Commission. As expected, the company's internal studios will be untouched, but the cuts are still deep, affecting up to 240 "selling, general and administrative personnel worldwide." But cutting those people loose is going to bring some special pain of its own, to the tune of about $11 million in special charges.

"These charges will primarily be severance costs for affected employees, which are estimated at approximately $8.0 million, potential charges related to other fixed assets that may be abandoned, which are estimated to be up to $2.5 million, and contract terminations, which are estimated at approximately $0.5 million," the company reported [PDF format]. "Of the total charges, $8.5 million are expected to be cash expenditures. Of the cash expenditures, approximately $4.5 million are expected to be paid in the quarter ending March 31, 2012; approximately $2.5 million are expected to be paid in the quarter ending June 30, 2012; with the remainder to be paid thereafter."

THQ President and CEO Brian Farrell is also facing cuts, not to his job but to his salary, which is being reduced by 50 percent for one year, from $718,500 to $359,250. His lump sum compensation for being terminated without cause was also reduced, "from three (3) times the annual rate of the highest bonus amounts Mr. Farrell received during any prior fiscal year to one (1) times such bonus amount." Not that he'll be suffering too much; according to Forbes, Farrell's 2010 salary was $677,000 but his "total compensation," including non-equity incentive plan compensation and option awards, was nearly $2.5 million.

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He really needs to take a 100% pay cut and a pink slip.

The_root_of_all_evil:
He really needs to take a 100% pay cut and a pink slip.

Reducing his "termination without cause" clause is basically the board saying, "Last chance, buddy. Shape up or you *will* be shipping out."

Kwil:

The_root_of_all_evil:
He really needs to take a 100% pay cut and a pink slip.

Reducing his "termination without cause" clause is basically the board saying, "Last chance, buddy. Shape up or you *will* be shipping out."

He already should have been kicked out some time ago. This is just waiving a finger at him. If he screws up this last chance, THQ is going under - never mind him.

The_root_of_all_evil:

Kwil:

The_root_of_all_evil:
He really needs to take a 100% pay cut and a pink slip.

Reducing his "termination without cause" clause is basically the board saying, "Last chance, buddy. Shape up or you *will* be shipping out."

He already should have been kicked out some time ago. This is just waiving a finger at him. If he screws up this last chance, THQ is going under - never mind him.

They're announcing third quarter results in about an hour here. I'm betting from this move those results aren't going to be good and these things are intended to give investors hope for the upcoming quarter.

Unfortunately, nothing really left to short on the stock right now.

That said, I doubt they'll go under completely. More likely Zenimax will buy them out.

Hell, wouldn't surprise me if Zenimax investors are heavily shorting them right now as it is.

Kwil:

The_root_of_all_evil:

Kwil:
Reducing his "termination without cause" clause is basically the board saying, "Last chance, buddy. Shape up or you *will* be shipping out."

He already should have been kicked out some time ago. This is just waiving a finger at him. If he screws up this last chance, THQ is going under - never mind him.

They're announcing third quarter results in about an hour here. I'm betting from this move those results aren't going to be good and these things are intended to give investors hope for the upcoming quarter.

Unfortunately, nothing really left to short on the stock right now.

That said, I doubt they'll go under completely. More likely Zenimax will buy them out.

Hell, wouldn't surprise me if Zenimax investors are heavily shorting them right now as it is.

Yeah i only trust zenimax and thq as publishers.
Thq because they Released the 40k addons for 30 euro's each a fucking steal.
And zenimax because thy are private and let their dev's fuck around.

I have a hard time seeing THQ make it through this. If Pachter is right and a cash shortfall is looming by mid-year, even having to eat an $11 million payout, which is relatively tiny as these things go, could be crippling. I think it waited too long to take steps and now, much like Midway, it's just a matter of how many times it's going to kick before it finally stops moving.

The_root_of_all_evil:

Kwil:

The_root_of_all_evil:
He really needs to take a 100% pay cut and a pink slip.

Reducing his "termination without cause" clause is basically the board saying, "Last chance, buddy. Shape up or you *will* be shipping out."

He already should have been kicked out some time ago. This is just waiving a finger at him. If he screws up this last chance, THQ is going under - never mind him.

I don't know why you say that. The guy made mistakes and prior to this news he had already announced he was going to take the company in a different direction that focused on their core game licenses. Also, he has held his position at THQ since 1995. Meaning that he is every bit as responsible for their rise from mediocre game publisher/developer to fantastically successful publisher/developer, as he is for their current financial problems.

Interestingly enough, it's mostly luck and he is mostly not responsible for either case. It's just the luck of the times. At least according to the likes of Leonard Mlodinow and David Shenk.

But, accordingly, it's easy for people to take a stance like yours since hindsight is the only thing that is 20/20 in real life. It's simply more likely he could fix their financial woes better than someone with little or no experience. He has a definitive plan that is different than his plans have been for the last 3-5 years, that is a great start. I for one am glad he is staying on, I like their major properties and I don't see any other person more qualified to ensure the games that I liked get proper care.

Baresark:

I don't know why you say that.

Share Price Prior: >$36
Share Price Now: <70c

But, accordingly, it's easy for people to take a stance like yours since hindsight is the only thing that is 20/20 in real life.

I think that anyone anywhere that lost 5000% of a company's net worth is a little more than hindsight.

That's like shutting the stable door after the horse sends you a postcard from abroad.

Show me something that's going to induce a 1000% increase in profits, and I'll retract that slip.

The_root_of_all_evil:

Baresark:

I don't know why you say that.

Share Price Prior: >$36
Share Price Now: <70c

But, accordingly, it's easy for people to take a stance like yours since hindsight is the only thing that is 20/20 in real life.

I think that anyone anywhere that lost 5000% of a company's net worth is a little more than hindsight.

That's like shutting the stable door after the horse sends you a postcard from abroad.

Show me something that's going to induce a 1000% increase in profits, and I'll retract that slip.

What your asking is impossible. No one could show you that, because no one can say for sure. No one can get you your 1000% stock increase. You also stated a stock quote that he is responsible for. You provided your own evidence. Like I said, your hindsight makes you think that's a good idea, but you have no idea what is a good idea in that situation (neither do I, but I'm not talking in definitive statements). They are equally likely or unlikely to thrive with a change as they are with Brian Farrell, it's called regression towards the means. The median of the stock price is $18. That makes both $36 and $0.79 an extreme, therefore mathematically, they are likely to increase (regress) towards the mean value of the stock (which is closer to $18). No matter who is in charge. All I'm saying is that he is as good a candidate as any to hold that position. And he took a substantial paycut and contract change. If they got rid of him, they would have had to pay him a substantially higher severance package. Now he is completely invested in the company and will do his best to make them successful again.

Baresark:
They are equally likely or unlikely to thrive with a change as they are with Brian Farrell, it's called regression towards the means. The median of the stock price is $18. That makes both $36 and $0.79 an extreme, therefore mathematically, they are likely to increase (regress) towards the mean value of the stock (which is closer to $18). No matter who is in charge.

Do you have some form of weird mathematics in your universe? Because there's a certain market force that is causing EVERYTHING to reset its mean because there's a lack of money.

It's called a Depression. And that 79c is greater than 70c.

You're positing the idea that this is a statistical deviation from one extreme to the other - at the same time as every other company is also experiencing the same slide. Is it possible therefore, that this is an overall trend that has nothing to do with THQ?

Or just that none of Brian Farrell's ideas have worked, he has no long term plan and he was riding on earlier successes? Because that's all the evidence points to.

TL;DR: Means Regression only works on a statistic that is equally likely to increase or decrease. Market Forces are forcing a decrease. The mean decreases at that point. The deviation is based on popularity, luck and skill. None of which Farrel has shown.

And I believe I've already outlined a reasonably clear proposal last time that could get back 100% last time this topic was done. Hindsight would be saying I can stop the reversal that's already happened. Foresight is saying "Farrell has failed. Empty your desk."

OH MY GOD! Only $359,250 a year?!? However will he survive?!?!

The_root_of_all_evil:

Baresark:
snip

Do you have some form of weird mathematics in your universe? Because there's a certain market force that is causing EVERYTHING to reset its mean because there's a lack of money.

It's called a Depression. And that 79c is greater than 70c.

You're positing the idea that this is a statistical deviation from one extreme to the other - at the same time as every other company is also experiencing the same slide. Is it possible therefore, that this is an overall trend that has nothing to do with THQ?

Or just that none of Brian Farrell's ideas have worked, he has no long term plan and he was riding on earlier successes? Because that's all the evidence points to.

TL;DR: Means Regression only works on a statistic that is equally likely to increase or decrease. Market Forces are forcing a decrease. The mean decreases at that point. The deviation is based on popularity, luck and skill. None of which Farrel has shown.

And I believe I've already outlined a reasonably clear proposal last time that could get back 100% last time this topic was done. Hindsight would be saying I can stop the reversal that's already happened. Foresight is saying "Farrell has failed. Empty your desk."

It's not weird mathematicsat all. The mathematics are simple as outlined by the work of Francis Galton and a group of mathematicians he worked with (he was not a mathematician after all, only one histories most famous polymaths). You say regression is only possible in areas where deviation is possible. It is possible that the overall trend has nothing to do with THQ. It is possible that the overall trend has nothing to do with Brian Farrell, therefore they do not lose anything by keeping him on, especially since he has decided to redirect the company. If they fired him and got a new guy, they would be paying someone at least what Brian Farrell was making and they would be just as likely or unlikely to regress upwards.

My point is that no one has actual foresight that means anything but speculation. It's that speculation that lead him to try and branch out, which is where he failed. The failure most likely wasn't that he tried to branch out, but what he decided seemed like promising areas to go to. He was wrong. As an example of what I'm saying. Any meteorologist can look at the weather the last 5 days and tell you exactly why things happened the way they did. But when they speculate towards the future, the failure rate is somewhat legendary (as the common joke implies(it's not really but people remember the failures because they are more extraordinary than the times they were right)).

Also, you cannot say none of his ideas worked since he was the CEO of THQ for 11 very successful years before the stock fell out. Of course market forces are affecting the stocks, like it is all other stocks. But to say that there is no money out there is not true. There is, but you must appeal to the people who have it/are will to spend it on your products, which was not kids (the branching alluded to earlier).

I think you and I have a different idea of what hindsight is. The idea of hindsight isn't that someone can stop what is already done, hindsight is being able to see an exact reason why events unfolded the way they did. It's also what drives a deterministic point of view. Foresight is just speculation. I'm simply speculating that Brian Farrell is just as good as any potential candidate to prevent THQ from being delisted. Why? Because there is a greater likely hood that tomorrow the stock will regress towards the means. Hindsight in this case lets us know that the direction he has had the company going in the last probably 7-8 years (5 years in practical time) years is improper and wrong. So, he is looking at his past and speculating that turning towards the core game franchises and making them as good as the company can is the best direction for the company. I'm speculating this is a good idea for the business.

Not to mention a CEO change is a ridiculously stressful time for a company and replacing Brian Farrell at this point would not prevent the company from being delisted. My foresight tells me that Brian Farrell is probably the only hope the company has.

Also, I had used the figure .79c yesterday because of what the company closed on yesterday. Regrettably it opened at a paltry .56c and closed today at a whopping .53c.

TL;DR - means regression is only dependent on a the mean activity a person or company does. To say there is not a likelihood of increase or decrease at this point is just not true. Also, you almost have it right: success is based on skill and mostly luck. As Daniel Kahneman stated his favorite equation to be; skill + luck = success. Great success = little more skill + a lot more luck. Likelihood of deviation is just mathematical fact. Regression towards the means states that deviation is most likely to be towards the mean and less likely to be away from the mean. The only thing that is completely uncertain is the time frame.

Baresark:
It is possible that the overall trend has nothing to do with Brian Farrell, therefore they do not lose anything by keeping him on, especially since he has decided to redirect the company. If they fired him and got a new guy, they would be paying someone at least what Brian Farrell was making and they would be just as likely or unlikely to regress upwards.

Possible isn't a likely outcome.
You have stated it's impossible for them to create a 1000% rise.
That would raise their stock to $7.
You stated the mean of the stock would be $18.
That means you are directly stating it would be impossible for Brian Farrell, or anyone, to raise the stock to 40% of it's mean value. The lower 20% of it's deviation.

That is why I am questioning your mathematics.

Any meteorologist can look at the weather the last 5 days and tell you exactly why things happened the way they did. But when they speculate towards the future, the failure rate is somewhat legendary (as the common joke implies(it's not really but people remember the failures because they are more extraordinary than the times they were right)).

Your analogies are very pretty, but if a meteorologist made a 5000% loss on the isobars, well...

Yeah, that didn't go down well.

I think you and I have a different idea of what hindsight is.

Indeed.
noun
recognition of the realities, possibilities, or requirements of a situation, event, decision etc., after its occurrence.

You don't seem to be recognising anything. Including a 5000% drop in share prices that's the direct responsibility of the CEO.

I'm simply speculating that Brian Farrell is just as good as any potential candidate to prevent THQ from being delisted. Why? Because there is a greater likely hood that tomorrow the stock will regress towards the means.

OK. Can you provide ANY evidence for that, or your definition of the mean, because all you seem to be doing is trying to pull a fast one. For a start you're talking about an index that has a fixed assymptote at 0, so standard deviation cannot work. For another thing, you're taking a mean based on only recent activity, ignoring past work, market forces and resource acquisition. And finally, you're applying a binomial distribution to a growth point.

That's statistically BS.

I'm speculating this is a good idea for the business.

But that's all your doing. You're speculating based on an optimistic appraisal of a man you have no idea on, whose track record is of crashing something into the ground, while being dragged across the mud by a former employee.

Not to mention a CEO change is a ridiculously stressful time for a company and replacing Brian Farrell at this point would not prevent the company from being delisted.

Rubbish. We've swapped CEOs quite a few times. Usually to get rid of the money-grabbing idiots.

My foresight tells me that Brian Farrell is probably the only hope the company has.

That doesn't even make sense. If you mean "your analysis of statistical growth", provide evidence. If you mean "your blind optimism", state that. If you mean, as the definition states, "the act or power of foreseeing; prevision; prescience" , then sign yourself up as Sally Morgan's lawyer.

Also, I had used the figure .79c yesterday because of what the company closed on yesterday. Regrettably it opened at a paltry .56c and closed today at a whopping .53c.

Because there is a greater likely hood that tomorrow the stock will regress towards the means.

It's not. It's going down. WAY down.

TL;DR -

means regression is only dependent on a the mean activity a person or company does.

Neither are being measured.

To say there is not a likelihood of increase or decrease at this point is just not true.

Wasn't said.

Also, you almost have it right: success is based on skill and mostly luck.

It also requires work. That hasn't been happening.

As Daniel Kahneman...

A psychologist, not an economist. Or a business man.

Likelihood of deviation is just mathematical fact.

Deviation downwards within a Depression is a significant force. Deviation upwards while keeping the same structure that cause the downwards depression is a significant force against. There are no significant forces upwards.

Regression towards the means states that deviation is most likely to be towards the mean and less likely to be away from the mean.

Regression only takes place when in a set bi/tri/polynomial outcomes. This isn't one of them. Were it one of them, there would be no difference in firing or keeping Brian, as the trend would still be towards the mean.

The problem you have is that you have not defined the deviation, or the mean, or the specific curve it travels.

The only thing that is completely uncertain is the time frame.

The one thing that's certain is the time frame. It's when the share prices can no longer support the company.

Let's just say you're right though. This is a purely polynomial path that depends entirely on the cohesion of the company. The Standard Deviation points are at 0 and the high point of $35, giving a mean of $18 per share.

What effect would the loss of 240 people do to this cohesion, when you're unprepared to lose 1?

The_root_of_all_evil:

Baresark:
It is possible that the overall trend has nothing to do with Brian Farrell, therefore they do not lose anything by keeping him on, especially since he has decided to redirect the company. If they fired him and got a new guy, they would be paying someone at least what Brian Farrell was making and they would be just as likely or unlikely to regress upwards.

Possible isn't a likely outcome.
You have stated it's impossible for them to create a 1000% rise.
That would raise their stock to $7.
You stated the mean of the stock would be $18.
That means you are directly stating it would be impossible for Brian Farrell, or anyone, to raise the stock to 40% of it's mean value. The lower 20% of it's deviation.

That is why I am questioning your mathematics.

This is getting nowhere fast. I never said it was impossible for the stock to rise 1000%. You are twisting my words. I simply said that there is not plan that you can say will definitely raise the stock 1000%. It's because foresight is not possible to any degree near absolute certainty because we do not live in a predetermined world. I didn't speak as if anything was a likely outcome at all. I could direct you to the original comments on this debate where you said Brian Farrell should be fired and I disagreed.

Any meteorologist can look at the weather the last 5 days and tell you exactly why things happened the way they did. But when they speculate towards the future, the failure rate is somewhat legendary (as the common joke implies(it's not really but people remember the failures because they are more extraordinary than the times they were right)).

Your analogies are very pretty, but if a meteorologist made a 5000% loss on the isobars, well...

Yeah, that didn't go down well.

Your words are needlessly condescending. You actually proved my point beautifully. I said meteorologist have a known record of being wrong and you proved that. They are wrong because they, like anyone else, do not have foresight to a degree necessary to see all the patterns and how it will all happen. I only put my double parentheses in there to show that people have a tendency to remember the odd things, and forget that a part of the time they are correct for some areas (not all of course). You see, you also proved to me that I was right when I said that. Why? Because you picked out a time when they had it wrong. Why did they have it wrong? Because they don't actually have the super power of 100% accurate foresight (like all of us).

I think you and I have a different idea of what hindsight is.

Indeed.
noun
recognition of the realities, possibilities, or requirements of a situation, event, decision etc., after its occurrence.

You don't seem to be recognising anything. Including a 5000% drop in share prices that's the direct responsibility of the CEO.

Well, I see you are every bit as talented a "googler" as myself. You have put the dictionary definition of the word down, but then you said this: "Hindsight would be saying I can stop the reversal that's already happened" (in the interest of fewer quotes I just quoted you the old fashioned way). Which is the wrong idea of what hindsight is. You can see exactly why things happened the way they did, but you seemed to imply that meant trying to change what had already happened, which I'm sure I don't need to point out the impossibilities of that to you.

You also seem to get quite a kick out trying to say that I am not seeing the whole picture. But I am. I know he failed the company. But you don't seem to remember that he was the CEO of the company for 12 very successful years prior to the last 5. I never said he didn't make mistakes, as a matter of fact I pointed out some of his mistakes. But your awesomely accurate hindsight tells you he is a hack because of the last 5 years and the first 12 years were mere luck only (totally possible, but that would mean he also had some skill too).

I'm simply speculating that Brian Farrell is just as good as any potential candidate to prevent THQ from being delisted. Why? Because there is a greater likely hood that tomorrow the stock will regress towards the means.

OK. Can you provide ANY evidence for that, or your definition of the mean, because all you seem to be doing is trying to pull a fast one. For a start you're talking about an index that has a fixed assymptote at 0, so standard deviation cannot work. For another thing, you're taking a mean based on only recent activity, ignoring past work, market forces and resource acquisition. And finally, you're applying a binomial distribution to a growth point.

That's statistically BS.

I'm literally doing none of those things. It doesn't matter what the index is based on. Why? Because we are not talking about the entirety of the NASDAQ, we are talking about THQ and their personal record of growth and recession. I'm simply stating the statistical fact worked out by Francis Galton and a group of mathematicians. He specifically stated it as "Regression towards mediocrity", now known as regression towards the means. We are talking about the means of the stock value of THQ and how it will land somewhere in the area of $18. Unfortunately, this is not definitive because it's hard to find stock records prior to 2002. The only way to be 100% sure would be to look at the stock records since he was CEO. I can safely say that me was responsible for the rise of the stock from $17.70 (February 6, 2002) to $36.76 (April 13, 2007). I can also say he is responsible for the stock going from $36.76 (previously dated amount) to .53c it closed at this very day. The way I see it, that is more years of growth than decline. But I'm using some weird math that only exists in my own little universe when counting years I suppose. But, I digress. If we take $18 as the mean (with the records I can find it would actually be higher than that, so we will safely say that 1/2 of $36 is $18 (more weird math, I know). The rules state that you are going to have a greater likelihood of moving back towards the means. And the more extreme it gets away from the means, the more likely it is to regress towards mediocrity.

I'm speculating this is a good idea for the business.

But that's all your doing. You're speculating based on an optimistic appraisal of a man you have no idea on, whose track record is of crashing something into the ground, while being dragged across the mud by a former employee.

Just as your basing your speculation on a mere 4 years of an otherwise successful career. You simply love to forget about the first very successful 12 years of his career. You should read The Drunkards Walk: How Randomness Rules Our Lives by Leonard Mlodinow (A physicist which is a highly mathematical field of study). It would show you just how random it all really is. And there is a direct example in there talking about company CEO's directly(and record company CEO's and movie studio CEO's and coaches of professional sports teams, etc). I digress again. So, because so much of it is random, we then only play the odds. And in this case, the odds favor a regression towards the means, only the thing we still do not know is the time frame. Give the opportunity it would regress towards the means, but if the company goes under before then, then we have run out of time. Remember, we are dealing with probability here, so just because there is a percentage, that doesn't mean it will go that way. Even if that percentage is 99.9%. Why? Because probability relies on large pools of data.

Not to mention a CEO change is a ridiculously stressful time for a company and replacing Brian Farrell at this point would not prevent the company from being delisted.

Rubbish. We've swapped CEOs quite a few times. Usually to get rid of the money-grabbing idiots.

I guess we should all be grateful your company was not on the verge of potential financial ruin when it happened. It's not the solitary stress of the CEO change, it's the addition of the CEO change on top of the already gargantuan stressors.

My foresight tells me that Brian Farrell is probably the only hope the company has.

That doesn't even make sense. If you mean "your analysis of statistical growth", provide evidence. If you mean "your blind optimism", state that. If you mean, as the definition states, "the act or power of foreseeing; prevision; prescience" , then sign yourself up as Sally Morgan's lawyer.

No, I stated it correctly. My foresight, which cannot be accurate anywhere near 100% (just like your foresight that he should be fired or the company face ruin which cannot be anywhere near 100%). I am speculating, just as you are speculating. I'm simply speculating based on his entire career, where you're speculating on the last 4 years of his career.

Also, I had used the figure .79c yesterday because of what the company closed on yesterday. Regrettably it opened at a paltry .56c and closed today at a whopping .53c.

Because there is a greater likely hood that tomorrow the stock will regress towards the means.

It's not. It's going down. WAY down.

It will definitely fluctuate. And I don't think it will go way down, it's already way down. If it goes way down there will be a net loss of one decent publisher/developer to the industry. It may go down though, as I explained, it's all about the time frame at this point and applying a probability that comes from a large portion of data and is applied to a very small portion of time.

TL;DR -

means regression is only dependent on a the mean activity a person or company does.

Neither are being measured.

False. To say the activity of the companies stock is not be measured is just plain wrong. The stock of the company is being measured, which is being used to measure the worth of the man to the company. They board of directors (who know a lot more about what is going on than either you or I) seem to think he is worth giving another chance to. I just don't see a problem with their choice. You seem to think you know better than they do.

To say there is not a likelihood of increase or decrease at this point is just not true.

Wasn't said.

You got me there, my mind must have wandered at some point.

Also, you almost have it right: success is based on skill and mostly luck.

It also requires work. That hasn't been happening.

Skill doesn't develop without work, so work is implied. And it has been happening. Perhaps you didn't read about "THQ's $100Million Mistake". Lots of work has been happening, just not beneficial work. As I have previously stated, we all know he has made mistakes in the last 5 or so years of his career. No one is disputing mistakes have been made.

As Daniel Kahneman...

A psychologist, not an economist. Or a business man.

If you did some investigating besides the random Google search, you would see that he won his Nobel Prize because of his work on intuitive statistics and what came of that. He used actual statistics in his data to show the errors that are made following the logic of intuitive statistics. He also used it to show how accurate intuitive statistics can be in a given situation. Also, the gentleman he worked directly with in his research was named Amos Tversky, who was a mathematical and cognitive psychologist. His name is mostly bereft of references in Kahneman's work because Kahneman received a Nobel Prize for after Amos Tversky's death.

Likelihood of deviation is just mathematical fact.

Deviation downwards within a Depression is a significant force. Deviation upwards while keeping the same structure that cause the downwards depression is a significant force against. There are no significant forces upwards.

That is true. The force of a depression is a major stressor on any business. But, since some businesses are still highly profitable, I can only take that as it is a force capable of being overcome with intelligent business sense and a healthy understanding of the business cycle. There is of course a significant force upwards that you just want to ignore. The proposed idea of the new direction of THQ could be a significant for upwards. But only time will tell if it is or not. Once again, we can only speculate in our speculative ways.

Regression towards the means states that deviation is most likely to be towards the mean and less likely to be away from the mean.

Regression only takes place when in a set bi/tri/polynomial outcomes. This isn't one of them. Were it one of them, there would be no difference in firing or keeping Brian, as the trend would still be towards the mean.

The problem you have is that you have not defined the deviation, or the mean, or the specific curve it travels.

You are wrong on all accounts. The means I have defined is $18. And I don't need to define the deviation because Francis Galton defined the deviation for everyone who will ever use this concept. If the deviation if less or more than 1 (1 representing the mean value of $18(in this case)) Then there is a greater likelihood of regressing towards the mean (or 1 if you will). The greater deviation from 1 there is, the more probably it becomes that it will regress towards the means. But, we are talking about probability, not plausibility in this case. Which is more than likely a term you (like many other people) employ as a stand in for the term probability. You simply feel it is more plausible Brian is a mistake, I feel it is more plausible that he is not a mistake to keep around. The difference is that regression towards the mean is simply working in my favor. But, that is still not a definitive movement towards what I'm saying will happen at this point. But absence of evidence is not evidence of absence.

The only thing that is completely uncertain is the time frame.

The one thing that's certain is the time frame. It's when the share prices can no longer support the company.

Let's just say you're right though. This is a purely polynomial path that depends entirely on the cohesion of the company. The Standard Deviation points are at 0 and the high point of $35, giving a mean of $18 per share.

What effect would the loss of 240 people do to this cohesion, when you're unprepared to lose 1?

What you have stated is not a definitive time frame or stop date. You have stated a definitive situation, which is not nearly the same thing.

You are asking me to speculate further, which is what got us here. I have told you what my speculation is based on ad nauseum .

I have done my best to explain my stand point and provided you information on how exactly I have arrived at my conclusion. I did not state my conclusion as definitive, I have only tried to point out that your definitive statement is false up until it is proven true or false(as is mine(almost our very own Schrodinger's Cat)). I have enjoyed this back and forth but I have no interest in pursuing this simply because I have seen this more than enough times on the Mises.org forums. It can only degrade further to quoting single sentences and trying to dispute them. And then there will be big fights over semantics and it just gets uglier and uglier. Some of that has already started. I respect your standpoint and I look forward to seeing who is right. I hope I'm right because I enjoy a great number of their games (and to a significantly lesser degree because who doesn't enjoy being right). And if I'm wrong, I'm the first guy to say I'm wrong.

God damn. I just got a cold feeling down my spine when I imagined Relic being bought by Activision, Ubisoft or mother cunting EA.

Baresark:
I never said it was impossible for the stock to rise 1000%. You are twisting my words.

Baresark:

The_root_of_all_evil:

Show me something that's going to induce a 1000% increase in profits, and I'll retract that slip.

What your asking is impossible. No one could show you that, because no one can say for sure. No one can get you your 1000% stock increase.

You have put the dictionary definition of the word down, but then you said this: "Hindsight would be saying I can stop the reversal that's already happened" (in the interest of fewer quotes I just quoted you the old fashioned way).

What you did was cheat, which I'm getting increasingly sure is your way of obfuscating. I defined Hindsight as per the dictionary, and before I detailed what Hindsight would need to be to fit into your picture. It was NOT Definition and then Deviation.

But you don't seem to remember that he was the CEO of the company for 12 very successful years prior to the last 5.

It doesn't matter if you're a hack for one financial year. You get the boot.

But your awesomely accurate hindsight tells you he is a hack because of the last 5 years and the first 12 years were mere luck only (totally possible, but that would mean he also had some skill too).

Again, specualtion. My only concern is that he failed the company over a longer period of time than anyone else would have received.

I'm simply stating the statistical fact worked out by Francis Galton and a group of mathematicians. He specifically stated it as "Regression towards mediocrity", now known as regression towards the means.

Doesn't work in a system where functions are dependent on each other. That's why it works in exponential steps.

We are talking about the means of the stock value of THQ and how it will land somewhere in the area of $18.

Which you've not defined WHY it's $18. That's based only on 5 years of crashing.

I can safely say that me was responsible for the rise of the stock from $17.70 (February 6, 2002) to $36.76 (April 13, 2007). I can also say he is responsible for the stock going from $36.76 (previously dated amount) to .53c it closed at this very day.

Doubled over 5 years. 7000% drop in 5 years.

The way I see it, that is more years of growth than decline.

Ladies and Gentlemen, the court rests.

Rubbish. We've swapped CEOs quite a few times. Usually to get rid of the money-grabbing idiots.

I guess we should all be grateful your company was not on the verge of potential financial ruin when it happened.

We were in administration. We've seen a 1000% growth since that point.

The difference is that regression towards the mean is simply working in my favor. But, that is still not a definitive movement towards what I'm saying will happen at this point. But absence of evidence is not evidence of absence.

Because RtM will always work in favour of a company in free-fall. It will also work on an airplane in free-fall. It fails to register the very strong possibility of impacting on the ground.

but I have no interest in pursuing this simply because I have seen this more than enough times on the Mises.org forums.

Has it ever occurred to you that you are the one in the wrong?

The statisical chance of regression towards the mean is determined by the difference away from the mean. If there have been two further notches downwards since your original prediction downwards, that's running a huge probability against your viewpoint.

And you're also ignoring the 280 people that have been kicked out, the sworn "testimony" of the ex-THQ supporter and basing it on someone who has overall lost the company 3/4000% of it's percentage - and cannot put forward a plan guaranteed to recoup that.

Simply the fact that you're treating a group of people's lives like a collection of coin tosses (that's a binomial that has a regression towards the mean) should flag something in your mind.

The_root_of_all_evil:
snip

HAHA. Of course I could be wrong. I'm fully prepared to be wrong, you on the other hand are not. You seem to think you know more about what's happening at THQ than the it's board of directors and CEO. You asked me to show you something that could increase the value 1000%, which no one can show you something that will definitely do that. That's the impossible part. Also, you apparently do not get the boot if you are a hack for one financial year, so you're wrong in this case. Your only concern is the immediate past, I understand that bit. You have made the abundantly clear in your attempts to confuse this debate. Statistically speaking, your company was likely to grow regardless. As both Daniel Kahneman and Leonard Mlodinow have pointed out, your reasoning to your growth is a causal story that everyone believes for something that was just a statistical probability. This conversation has degraded significantly just because you see yourself as infallible in this case. I'm not treating anyone's life like a coin toss. But you clearly do not understand what I'm talking about. But if it makes you feel better to say that, then good for you. The situation has degraded but you clearly don't understand what probability means, and another e-dictionary copy/paste won't convince me you do.

At every turn I have answered your comments with exact information. The flag that should raise in your head is that you have not disputed anything I have said with anything but accusations that I'm wrong and repeated citing of last 4 years. You have not actually cited anything that went wrong in the last 4 years, only that it's all the CEO's fault. He certainly is culpable, but to identify him as the sole problem is just naive. The one time you brought evidence to bear you proved my point (your weather video). And as I said before, if I'm wrong, I'll admit it. But we won't know till it happens, just like you can't know what will happen with THQ till something happens.

So, let me do this: Whatever you say is not going to convince me because you will not bring any evidence to convince anyone, though I still see myself as capable of being wrong. Whatever I say will not convince you I am possibly right because you know more than the rest of us about economics (not likely), business (maybe), statistical evidence and just life in general. Have at it big guy.

A few more comments that need to be addressed though:

Which you've not defined WHY it's $18. That's based only on 5 years of crashing.

The mean is an average of the value of the stock, so if you haven't figured this out yet, then primary school is what you need. It may be lower than $18, but I cannot tell that since I cannot find data since before 2002. As I explained previously. Literacy is your friend.

I defined Hindsight as per the dictionary, and before I detailed what Hindsight would need to be to fit into your picture. It was NOT Definition and then Deviation.

That is false. I never explained that you could change what has already happened. You're now obfuscating. Funny how that works.

Ladies and Gentlemen, the court rests.

That is right, it proved my point perfectly. 12 years of growth followed by 4 years of decline.

In conclusion: Time will tell who is right. I can wait. We are both only speculating. Just based on different things. Good luck to you and I'm sure I'll see you at the finish line.

Edit: misplaced quote.

Baresark:

So, let me do this: Whatever you say is not going to convince me because you will not bring any evidence to convince anyone,

The one time you brought evidence to bear...

See...you can't even agree with yourself.

http://en.wikipedia.org/wiki/Regression_toward_the_mean

What you're exposing is http://en.wikipedia.org/wiki/Regression_fallacy, where you're expecting a regression towards the mean as you have classified a 5000% drop as a natural fluctuation.

It's a trend. A well documented trend.

Misapplication

On the other hand, dismissing valid explanations can lead to a worse situation. For example:

After the Western Allies invaded Normandy, creating a second major front, German control of Europe waned. Clearly, the combination of the Western Allies and the USSR drove the Germans back.

Fallacious evaluation: "Given that the counterattacks against Germany occurred only after they had conquered the greatest amount of territory under their control, regression to the mean can explain the retreat of German forces from occupied territories as a purely random fluctuation that would have happened without any intervention on the part of the USSR or the Western Allies." This is clearly not the case. The reason is that political power and occupation of territories is not primarily determined by random events, making the concept of regression to the mean inapplicable (on the large scale).

In essence, misapplication of regression to the mean can reduce all events to a "just so" story, without cause or effect. (Such misapplication takes as a premise that all events are random, as they must be for the concept of regression to the mean to be validly applied.)

Cause: Tried to trade recklessly in a Depression Environment with an expensive, worthless toy.

Your case WOULD make sense if the fluctuations of THQ were due to random state, but as they aren't, the overall regression is towards 0, where the company crashes.

This is held out by yesterday's trading.

The mean is an average of the value of the stock, so if you haven't figured this out yet, then primary school is what you need. It may be lower than $18, but I cannot tell that since I cannot find data since before 2002. As I explained previously. Literacy is your friend.

While finishing off your Ad hominem you realise that your numbers are fallacious as you have no data to work from. Literacy comes a poor second to Numeracy.

I defined Hindsight as per the dictionary, and before I detailed what Hindsight would need to be to fit into your picture. It was NOT Definition and then Deviation.

That is false. I never explained that you could change what has already happened. You're now obfuscating. Funny how that works.

I never mentioned you. How are you telling me that what I mean is false?

That is right, it proved my point perfectly. 12 years of growth followed by 4 years of decline.

I'm sorry, you stated 5 years of slow growth followed by 5 years of sharp decline. Would you like to bring those numbers back you stated, rather than snipping them out?

In conclusion: Time will tell who is right.

Problem: You can claim "right" by simple survival. I have to see THQ die off to claim "right". I'd rather waive that to keep them going.

Little Thought to End on though: If the company is regressing to the mean as your famous people have said, then it would do it with or without Farrell. Yet you state categorically that that 1 loss is worse than 280 losses. Which of us is claiming more knowledge of the workings of a company?

If it was me I would have fired that poor fellow that only gets 350k/year AFTER 50% pay cut oh my he really needs a work where he earns more....
When you earn that amount of money you should be able to lead a company successfully (ie not crashing a decent company to the ground stock wise and profit wise) and I would find it hard to put blame on everyone else since the stock has gone steadily down even before all economy crises...

I gotta be honest I don't understand a good chunk of this conversation (my specialty is most definitely not numbers and economics) I'm just a simple country boy turned big city detective.

I can say this if my clearance record for crimes solved dropped by that percentage I'm pretty sure if I was LUCKY I'd be not only taken off detective but demoted back to 'officer' (rather than sergeant) and I promise you that's well over a one year 50% pay cut.

Actually, if you're going by stock performance, Farrell hasn't done so bad.
THQI fell less and recovered better, percentage wise, than either EA or Activision from the '08 downturn. The divergence only really started happening in the last two-three quarters or so with the disappointing uDraw tablet, and really only took steam once that disgruntled ex-employee came out and basically badmouthed the entire board.

Unfortunately, that brought them down low enough that they became a viable target for the big hedges to pile on to. Right now it's sitting at a 12:1 short interest for a stock under a buck. To me it looks like someone's playing games and trying to set them up for a takeover.

Monkeyman O'Brien:
God damn. I just got a cold feeling down my spine when I imagined Relic being bought by Activision, Ubisoft or mother cunting EA.

You know... Activision is owned by Blizzard... I would rather see Blizzard (Or valve!!!!) pick up Relic than EA... And I would never want to see ANYTHING picked up by Ubisoft

Jesus Christ, that is one hell of an argument between root_of_all_evil and Baresark......

 

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