A company can execute properly but fall victim to factors beyond its control.
Shares of video game publisher THQ
The issue here is that the one area where THQ truly has a competitive advantage is with its licenses of properties owned by Pixar, as well as Viacom's
There are several investment realities being illustrated here.
The first is that with a smaller video game publisher, it might take only one or two hits to provide significant upside, which is the main reason I generally prefer smaller companies. The second is that, because of that very actuality, a smaller company will react more strongly to the delay of a single game than a larger company with a more diverse lineup, such as Electronic Arts
Just imagine if Take-Two Interactive
THQ shares had been on a roll, climbing from about $17 to $24 over the past two months, before Tuesday's announcement. Despite the delay of Cars, it should be noted that THQ has moved to develop more of its own properties, and I still believe that THQ is one of the more solid players in the game.
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Fool contributor Jeff Hwang owns shares of Electronic Arts.