Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ken Muller who wrote (7610)	11/8/1997 5:27:00 PM
From: Tom Terf	Respond to of 14577

Here is my update for next few weeks events.. 1. More suits .. total 6 by Nov. 21 big danger is that the SEC will be forced to open investigation based on the investor/public outcry of the lawsuits They have no choice. However, don't expect to hear anything from the FEDS .. they will just announce through S3 that they have started investigation. 2. Gary Johnson out as the fall guy .. by Nov.20 or sooner. They need to start serious closure and must push someone out who was involved in the scheme. 3. After frantic search...new CEO to be named in early December 4. $25 - 35M product writeoff announcement to cleanse the revenue stream going forward... by December 25. (This is S3's Christmas present to all us faithful shareholders !) 5 New CEO starts with clean 1998 slate. Inventory resales after Jan. 1 become bonus revenue. 6. December quarter loss, including the 0.60 writeoff is ($0.72) Other problems beyond legal.. They are losing high end designs to Nivana 128 and others. No S3 product in featured in top 4 popular 3D boards in recent November issue of PC Computing ..first time in 3 years this happening. Also, new Intel low end initiative means the sub - $ 1000 PCs will have this video function integrated into the microprocessor for next Christmas 1998. Cyrix/NSM, AMD, IDT will work their low-cost product microprocessors same way by mid-1998. So ..S3 is getting squeezed out of high end designs by Nivana128, 3DFx, Cirrus (again) .. and others ..and is losing the low end soon as well..after this current selling season is over. There are only 10 - 12 big customers in the world. You can't lose many of these designs and still be the leader. S3's time has come to step aside. They will take big sales hit this quarter, no doubt... so writeoff with new CEO will be necessary. Stock is trading vehicle.. each piece of bad news will cause 1/4 - 3/8 point hit from the present 7 3/8 base. Tax loss selling next 7 weeks will put pressure on the price as well. Trading range is : 5 3/4 - 7 1/4... 1 1/2 points.. I would support with buy orders 5 3/4 or less. Assets or low end BV is about $ 4 so that should be the floor.