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Technology Stocks : 3DFX

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To: robnhood who wrote (1264)1/14/1998 5:52:00 PM
From: William T. Katz  Read Replies (1) of 16960
 
Piranha,

I think it is near certainty that TDFX has been shorted recently. Contrarians love the Fool's pick and then go counter to them, esp. after a run-up. However, the volume has not been that large so the magnitude of the shorting can't be anything like Amazon (unfortunately).

I took some profit and then reentered on this pullback with a smaller position. I do think there is upside potential on this upcoming earnings conference. Also, I think there is real potential for 3dfx to make inroads into the traditional home game machine as price points continue to drop on the general PC architecture. We now have HP computers (w/o monitors) retailing for $800 with Pentium MMX chips. I have no doubt that there will be some cheap specialized game machines within the next year that will use clone x86 CPUs (real cheap), just enough RAM, a specialized graphics processor (Banshee) that outputs to a TV, a CD-ROM for loading game, and some input devices. It could run all the games for PCs yet cost well below $500.

-Bill
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