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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Hiram Walker who wrote (13386)	7/18/1999 10:18:00 AM
From: SBHX	Read Replies (2) \| Respond to of 14577

Sales is a good indicator of value, but not when margin dwindles as drastically as it has for DIMD and all non-chip board houses recently. (Off Topic) As P/E is ridiculuously high or negative for many us companies, I noticed a lot of talk about Price/Revenue, I don't know if this is healthy, I think if the market is willing to forgive -ve E or high P/E, it just makes it easier for some companies to concentrate on selling at little or no margin, which just makes any bubble-effect worse. Anyway... If the 18.2M shares re going to be new, it will take a while for the effect to be absorbed. This sort of dilution is dangerous. If you already own both DIMD and SIII, then it's not so bad, but if I own SIII, then it really comes down to whether I really think that each DIMD is worth 0.52 SIII. If you think it is, then you're ok. No doubt Potashner is a good salesman, but he also sold the majority of his holdings at a ridiculously low price between 8-8.5. This is one of the big mysteries about this stock. If SIII is a steal at 12+ or 11+, why did Ken sell at 8.5? Now I can't pull the trigger --- I think volatility is high until all of this plays out. It's easier to understand the effect if the details of what is to be sold off and for how much is announced, and how exactly how many new shares are issued. If there no new shares, and the 18.2M shares are bought back by selling UMC shares, then this a more stockholder friendly solution, and it's a worht a buy. ...DIMD is selling at approximately 0.25 times sales. It is gonna drop SIII's p/sales through the floor,what a steal they made on DIMD. The turn around in SIII is just beginning if Potashner is as good a CEO as he is a salesman. As for Whitney. It passed one of the acid tests. It plays Quake3 so-so, not far behind a savage4. The problem with 3D chips is not that all chips are the same, they have different performance levels (fill-rate). Fill rate ultimately determines the frame rate of games. Savage4's fill rate (@125MHz) is on the wrong side of middle of TNT2 and a whitney. So Whitney has to stumble either in pricing or production or strategic company roadmap. Or intel could be afraid of cannibalizing PIII sales and make Whitney-celeron MBs severely crippled, that could destroy sales of potential whitney systems. It may still happen.