I agree, TDFX/STB combination makes a lot of sense. I will admit my first reaction wasn't positive because it would throw a wrench into the recent strong showing. After thinking about it on the way home I think they HAD to do this NOW. I would have preferred a buy out on strength but I really don't think they had a choice.
1) CREAF buying their stock put fear in their eyes. Boardmaker competition makes them a valuable prize. TDFX believes it has a vision for the future and getting taken over would have take them out of the drivers seat without giving it a chance.
2) As we know, TDFX suffered lot's at the hands of DIMD. STB has a very good reputation for delivering the goods. Even if TDFX management is not yet ready to deliver on the production side, they get STB people that can.
3) CREAF, DIMD and company show cased their nVidia TNT products at COMDEX and put V2 on the back burner. V2 is still a quality board and is not yet ready to be buried. However, current environment makes it that the board makers are only willing to push the "hot" products for a short time and then are ready to move on. More money for them because they can work a 3 month cycle - bad for TDFX because a 3 month cycle doesn't pay all the bills. Look at Guillimot (spelled incorrectly) over in Europe, they show allegiance and dedication and support their market real well. Buying them in the summer might not be a bad idea - are they public?
4) IF buying STB gets them DELL, the price they paid is way too cheap regardless of the financials. DELL is the marquis OEM. Wall Street will bid up TDFX with that relationship alone.
5) Gateway and a few others are loyal to TDFX - they don't even bother mentioning the boardmakers name. If the TDFX name is selling the card, what marketing value is the boardmaker providing - none. All they're doing is copying the drivers their given and assembling the cards. STB can do that with their eyes closed and they have a long relationship with DELL and others to prove it.
6) Weren't people SLIing V2 cards from different makers - doesn't TDFX go as far as making the reference board. Wouldn't their be some cost savings in that the design people would be working closely with production from day 1 - quicker time to market, less duplicate effort, etc.
7) The down side is the loss of marketing dollars from a host of companies. However, given TDFX's recent experience, the amount of this contribution has dwindled since their seems to be a lack of strong commitment on their part.
8) Take a look at what people have been saying on the threads about the boards that they bought. All boards were essentially the same except everyone seemed to have problems unique to their own boards. I'm sure some of this was TDFX's doing but I think that boardmakers may have made the problems much worse. How could you have happy and unhappy customers for what's supposed to be the same thing.
Anyway, this little note has gotten way out of hand. I may not make any money on this stock but it does give you a nice ride. Joe C. |
