Well, like I said yesterday, 3Dfx is fundamentally changing. I broke my rules and I got the kind of spanking that will make it difficult to sit for a while :( To begin with, I should have closed my position since the company was not returning investor enquiries, rather than just shifting trading mentality (which was another way of saying I'll sell at the first sign of weakness). I did not expect the bombshell we got today, but then again, bombshells are never expected. I should have also gotten the hell out of CDN, because as I said on AoI, it was not behaving as expected. My portfolio is in the same caliber of stocks as STIA, and today for the first time in a month, it widely underperformed DJIA, down 282 vs down 126 for the Dow. :((
As far as 3Dfx goes, the risks just increased by an order of magnitude. Don't get me wrong, I agree that they should be vertically integrated. But I just don't know how well they will execute. I really hate uncertainty. Something that I think the market has not had the time to react to yet, is the effect this will have on all the other players.
I think the 3Dfx deal significantly improves the prospects for nVidia because now Diamond and Creative will fight teeth and nails to control (or at least prevent others to control) nVidia. If I were Creative, I'd buy nVidia. This would highly destabelize Diamond's position. If I were Diamond, I'd bet the ranch on nVidia. There are not that many good graphics chips around and if you are primarily a graphics card maker (as Diamond is) then you need good suppliers or you die. The interesting thing here is that through STB, 3Dfx actually is a part owner of nVidia and as such will have some influence over what nVidia will end up with.
As far as the rest of the industry goes, I don't have a clue. But I sure would like to know more. There is a fortune to be made if you can tell who is going to be acquired next and who will be left out. By all means, do comment on this.
Sun Tzu
P.S. I really would like to know who were the advisors on this merger .
PPS Jim, I bet you're very happy to have had that stop loss now. |
