Casey, be it far from to argue with someone who has the same initials as Clark Kent <g>. But I have to say that I think you are too generous to the management. The gist of what I gathered from your response was that yes 3dfx has made mistakes but they have been short term in nature and their long term moves are good. Which is another way of saying that they have good vision (which I've always said) and that they stink in their day to day moves (which I've also always said). So it seems to me that we are essentially in agreement on the management's actions, but we vary on how important those "short term mistakes" are to the company's long term success.
My contention is that they are very important, not because of themself, but because they show a pattern of mismanagement; short term mistakes happening over a long time are a long term problem. This is not to say that 3dfx keeps making the same mistakes, but that they keep making careless mistakes. This erodes my confidence in them, despite their good vision. You may know the way to the corner office, but you are not going to get there if you keep bumping into the office furniture <g>.
I was one the first to say that over/under estimating the demand was part of the learning process and that they deserve some slack. But their over all actions and lack of responsiveness to investor enquiries has made me reconsider that position.
Let me ask you and the thread a question: how do you judge the management's effectiveness? By the stock price? By revenue growth? By return on equity? By the long term success (which is too hard to estimate)? The truth is that all these factors are prone to forces beyond the management's control (sometimes). So the only way to judge the management is to see what goals they have set for the company, judge if those are good goals, and see how close they came to it given the circumstances.
As it stands, 3dfx refuses to reveal any information about their road maps so it is hard to judge them (perhaps this is by design). What little I have gathered from them has not been very reassuring.
(1) They have expressed on many occasions that they are interested in getting into the set-top business and alternative sources of revenue. Zero achievement so far. BTW, ATI has a partnership with GIC now. 3dfx should have gone after SFA (GIC's main competetor) with an offer and make it work.
(2) They have mentioned OEM accounts as very important for over a year now. Why have we not heard of half as many account wins as nVidia? And who cares if the cards are selling well in the retail market and the OEM demands don't make practical sense; they are the customers! If full AGP and 32 bit rendering is what they want, then that is what you should give them if you want their business.
(3) There are soft deadlines and hard deadlines. When a project is late by two months, it is often ok, except when you finish the Y2K project in February 2000. Then it is a major mismanagement and not a delayed project. Likewise, missing the back-to-school sales was a mismanagement.
(4) Relative to their asset size and quarterly revenue, the losses due to TNT overhang at STB and troubles with DIMD and CREAF were BIG. Yes this was a one time mistake. So is driving over a pedastrian (with a perfect driving record). Should we forget and forgive both?
I can go on and on, but I think I've said enough. BTW, I agree with you that the value of ads is more than the imediate sales it can generate. I will not comment on that since I cannot judge its success for now, only to say that the PR history at 3dfx is not good. I think using some of Pat's suggestions (as well as other's in the past) provides a very good bang for the buck.
Time will tell,
Sun Tzu |
