3DFX Message Board - Msg: 6659102

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Technology Stocks : 3DFX

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To: Mike Sesan who wrote (9340)	12/2/1998 10:40:00 PM
From: Michael G. Potter	Read Replies (1) of 16960

Interesting post over on MF: boards.fool.com Basically, the post says that DLJ figures 1.2 million Banshee chips and 500K V2 this quarter. Their estimate is .04 earnings. At $30 for Banshee (3dfx said 30ish, maybe a little higher or lower), that's $36 millions sales from Banshee. At $35 a chipset for V2 ( they did say that ASP for V2 would be going down and the $99 price point would make sense at a much lower ASP), that's another $17.5 million in sales or a total of about $53.5 million is sales. Margins will be lower than Q1 and Q2 (Banshee was always expected to have lower margins and the ASP of V2 has been dropping), so I wouldn't expect the .40 to .50 a share at over $50 million, but .04 is still low. Here's some of my guesses: 1) Price protection to suppliers on V2 chips in inventory 2) Lower than hoped for sales of V2 leads to more write-offs of inventory as V3 will kill V2 completely. 3) High Banshee launch costs + costs that were deferred in Q3 hit Q4. That's some of the questions I've been meaning to ask 3dfx if I could only get a hold of them. Michael ps - DLJ is estimating that V3 sales will start Q1 next year, but don't know how much yet.

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