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 : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Piranha who wrote (2265)	4/18/1998 4:07:00 PM
From: Ralph Bergmann	Read Replies (1) \| Respond to of 16960

Piranha, I really want to say one word about the analysts. In my impression they have absolutely no clue about what 3dfx is, what they do, and what they will do in the future. I think they simply guess their numbers based on no knowledge about this sector and maybe try to compare it to S3 or CREAF. They were wrong with their numbers all the time in the past and they will be wrong in the future. The good thing with these conservative estimates is that 3dfx will less probably miss the estimates. You know I wanted to sell my shares last Friday, but I didn't for serveral reasons: a)The reasons are that I feel the stock is still not exaggerated. The move on Friday was rather moderate if you consider the tremendous earnings surprise. b) This unexpected rise in earnings and revenues was what I want to call world market penetration. Sales went away from the US business to other countries e.g. Europe and Asia. This is a slow process which should also be seen in the following quarters. You could see it if you have a look back on Microsoft. These earnings surprises over several quarters were exactly this effect that product saturation in other countires was far away from the US business. c) The new games coming to the market are already rather slow with voodoo1. I am not a gamer but today I got a game which is already rather slow with my old 3dfx card. People will probably buy the new cards especially in the xmas season. I cannot understand that earnings predictions are so low for Q498. d) the problem with 3dfx is (as it was already mentioned on this board) that it is in the chip industry which is valued with lower PE's. An intelligent management should be aware about the short lived success in this industry. 3dfx has a very good management as it could be seen by their success which was enabled buy aggressive marketing and distribution politics. Now the key issue here: If they are aware of this fact then it would be logical to start up other products and services. A first step into this direction could be seen in the annoucement of 3D virtual Internet site. This is in my eyes the key for the future success. They have to go where no one has gone before ( sorry but I am a Trekkie). If this happens and if this is recognized by the market then 3dfx would probably be valued with much higher PE's. d) in October I wrote several posts where I claimed that 3dfx is not visible to the street. Now, I want to say that it is visible to the street but not to wall street. You could see it on Friday on the daily 'stocks to watch' list on yhoo, which comes out before market opens. There was no word about 3dfx but on the some day yhoo was mentioned. Financially spoken yahoo is the smaller company but every inverstor is aware of it. 3dfx is maybe in the status of a small child in investors eyes, which will have some fun in the moment but most probably will retreat in the near future and the "parents" will overtake its business later. Whether this will happen ... it is of course an open question. The only importent thing is whether 3dfx will get visible for investors. I think it just starts to do so. e) In the recent days we had a tremendous volume, where I would like to say most of the shares changed hands. All these people bought at high prices and they will not easily give their shares away for a few bucks more. f) Probably there will be issued new shares in the near future. If I were at 3dfx I would try to increase stock price with additional good news before I do it. Together with the current good sentiment I think it is possible that we walk trough to 40$ in the next 2 weeks. If this happens I will probably sell the shares. Whether I will reenter ... I don't know. As I mentioned in an earlier post the risk of a drop is very high. I will have a close look on this new product issue. Nevertheless, I think 3dfx has the capability to double in a forseeable future, if there is no problem with the market in general. So far ... Best Regards Ralph