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To: slacker711 who wrote (35886)	12/2/2000 5:36:20 PM
From: Robert Jacobs	Respond to of 54805

Slacker: Just to be clear, Cree did not "stuff the channel" with moissanite. C3 "stuffed the channel" all on their own. Cree was the vendor, C3 the customer. When it became apparent that C3's strategy of direct sales to the retailer was not working, they wound up with losts of inventory. The C3 investors in essence transferred their investment to Cree in sales...not a happy circumstance for them and C3's stock has suffered accordingly. The simple point now is that Cree is happy to sell them more crystals when they are ready but Cree is not at all depending on these orders for revenues. I have met all three Hunters. Once has to understand these are brilliant guys who started Cree with essentially a credit card. They are entrepreneurial and have independent but mutually compatible business interests. The World Theatre investment which has Eric Hunter as the founder (but not the CEO) could produce significant orders for LED's. As an investor in World, I can say that the venture was oversubscribed. I think Neal wanted a stake to have privileged position in the supply chain...and once again...even if it was a "bribe" to get World to place orders (ludicrous if you talk to Eric as SiC is the only LED robust enough to be used outdoors so he would have used Sic anyway), a $5m check to reap many $$M in orders would be a good investment to me. World plans to build 10,000 billboards over the next five-ten years each using 500k +- Sic LED's which means $100k worth of LED's per billboard @.20ASP x 2,000 per year is $200,000,000/yr in sales when they get rolling. Let's say they only do 25% of that...that's $40m in biz per year...not a bad ROI. I do wish now that a firestorm has erupted again that Neal didn't make the World investment a private one but I think it was important that Cree had an inside look at what World was doing.

To: slacker711 who wrote (35886)	12/5/2000 4:04:37 PM
From: 993racer	Respond to of 54805

To: slacker711 who wrote (4463) From: 993racer Tuesday, December 5, 2000 4:02 PM ET Reply # of 4464 Slacker, Im glad you brought this up, I was jut gonna post something in advance of tonite's Rocker Partners radio show-I've also had some discussion with HG about this via email. Even though C3 is no longer counted on for revs at Cree-HG (by way of Rocker) is stressing this C3 thing with Hunter's bro as the pres. Quite understandable. Well lets put this into perspective. C3 is the exclusive customer of Moissanite. Cree has developed a process and commited part of their valuable production capacity (which is otherwise in backlog) to Moissanite production. Therefore it is expected that C3 must by ALL gems that are produced. Initially, this was fine as supply was not keeping up. Then, as Cree's history (and hopefully future) have shown, they get better at producing the stuff and are able to "ramp" production...except C3 cant sell it that fast...C3 was doing the selling themselves (this is C3's flawed business model, they did not take on outside distribution). Cree is still producting the Gems, and C3 MUST take them... Inventory builds and we are where we are today. IF C3 was not Cree's only gem customer, and C3 was stuffed with inventory..I would be very nervous..but C3 is the ONLY customer for gems so they HAD to buy it to keep "exclusivity" In the meantime, Cree has worked with C3...buying back the equipment and converting production capability to other uses such as led, rf etc... I hope this helps you understand this now.. good luck, racer