S3 (Multimedia semi's place 2be) Message Board

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Technology Stocks : S3 (Multimedia semi's place 2be)

SIII 0.0001000

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May 12 5:00 PM EST

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To: James T. who wrote (9086)	5/31/1997 9:53:00 AM
From: Dave O.	of 9477

James, Please rethink your post. NASDAQ ended up down just 2.7 points for the day, that's .02 of 1%, or nothing. Second, just because the stock was $18 a few months ago doesn't mean anything. Since that time there HAVE BEEN significant changes. Pricing pressures caused a downward revision in EPS. Whereas the "old" expectation was $1.35, the revised numbers are in the $0.85 to $0.90 range. That's about a 35% drop. Gee, a drop from $18 to $12 is a 33% drop. Most analysts have revised their targets to $17-18 in the next 12 months, down from $25-30. Are analysts always correct? Absolutely not! This certainly doesn't mean they can't revise estimates back upward if Sonic Vibes, etc. are well received in the latter part of the year. And how do we know there won't be further pricing pressures from others, like TRID or ATI in an attempt to gain market share. Last, why do you say "the current value should be $30"? Based on this years estimates that's putting a P/E of about 35 on S3, currently much higher than expected growth rate. I'm long S3 but think you need to look at "reality". Dave

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