S3 (A LONGER TERM PERSPECTIVE) Message Board

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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)

SIII 0.0001000

0.0%

May 12 5:00 PM EST

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To: stock talk who wrote (13185)	6/22/1999 11:42:00 AM
From: Ben Wu	Read Replies (1) of 14577

Personally I think S3 is nuts. At current prices, the .52 valuation would put DIMD at approx. $4.9. DIMD is on it's last legs. It can barely afford to pay it's bills. Recently, it returned nVidia over 700,000 shares in lieu of payment of it's bills. It also still owes 3dfx $4 million (in litigation). It's fighting with a bitter court battle with Creative. It's sound card business is flat. It's one shining darling was the mp3 RIO. but with 12 (TWELVE) companies coming out with competitors, even that market is starting to like a mine zone. Is DIMD worth it just for it's board making capabilities? Is the extra baggage worth it? Does S3 really want to enter the sound card/modem/mp3 player business? and most importantly, does S3 want to compete with CREAF? Also you have to wonder about the future placement of DIMD/S3 products. Will DIMD be a subsidiary of S3 and video products continue to be marketed under the DIMD name? That would make the most sense, since S3's name in the retail channel is worth about 2 cents. And DIMD isn't exactly known to be an OEM powerhouse. All in all, I don't expect S3's price to change very much from it's current value, after all, it's valuation is also linked to DIMDs (and the market DEFINITELY hasn't been nice to DIMD in the past couple of months). My prediction? DIMD shareholders will balk at the deal and nix it. I doubt CREAF would want to buy the S3/DIMD combo. It would make A LOT more sense for CREAF to pick up nVidia. nVidia has THE high performance chip right now, a low cost part just starting to hit the channel, and is HEALTHY.

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