But then I started to understand the situation a little better once I read more of the Reuters piece. THQ plans on offering convertible notes to help fund operations; the plan is to generate $90 million. Now, from a simple mathematical point of view, such an offering would tend to place pressure on the stock. Yet, I thought to myself: why isn't the market focusing on the great earnings results and placing a positive spin on the offering; in theory, management should do right by that offering considering the recent successful quarter, correct?

But then I began thinking about what drove the quarter: the very hot UFC 2009 Undisputed game. Maybe the market simply believes that THQ doesn't have much potential beyond this title. Actually, I thought that the upcoming pipeline mentioned in the release seemed at least a little intriguing. You've got some major brands coming up. As an example, a new Cars title, based on the famous Disney (NYSE: DIS) franchise, will be driving into retail later this year. Also, there will be a new SpongeBob SquarePants adventure.

Of course, that aforementioned Reuters piece also talked about weak guidance. Yet, if you look at THQ's stock performance for the year, you would have sworn that the market was ready to bid this one higher. Plus, THQ was recently handed an arbitration victory against joint-venture partner JAKKS Pacific (NASDAQ: JAKK) in a dispute over a video-game license relating to intellectual property from World Wrestling Entertainment (NYSE: WWE). I guess what I'm saying is I've seen worse earnings situations.

Personally, I wouldn't start a position in THQ. I continue to believe Activision Blizzard is the best idea in the sector. However, THQ might make for an interesting trade for some experienced investors out there if the sell-off in yesterday's after-hours session carries over into today's regular market activities (which appears to be the case). For now, all management can do is concentrate on ensuring the best use of its capital to sell as much software as it can on platforms from Sony (NYSE: SNE), Microsoft (NASDAQ: MSFT), and Nintendo (OTC: NTDOY). And if these companies announce any price cuts on their respective hardware systems, then THQ might really be good trading material.

Disclosure: I own Disney, Activision Blizzard; positions can change without notice.