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

To: Dave O. who wrote (10896)	5/9/1998 12:25:00 AM
From: John Nasser	Respond to of 14577

< Is no one concerned that they sold 1/3 of fab investment last quarter for about 26 million, which is what they lost on operations? Given that the current quarter will likely be a little worse since no new products will impact the bottom line will they have to sell another 1/3 of the fab? I'm neither long or short but worry when a company sells assets to offset losses and maintain their cash position.> True, no new products will impact the bottom line this next quarter, but don't forget about the TRIO 3d and VirgeMX design wins in the past several weeks. I highly doubt any more selling of their fab interest. (Reasons being: IPO will eventually come out; and to obtain use of the fabs capacity that s3 must have, a certain level of ownership must be kept.) JN

To: Dave O. who wrote (10896)	5/9/1998 3:10:00 AM
From: Don Earl	Respond to of 14577

Hi Dave, They didn't sell 1/3 of their interest in the fab for $26 million, they sold 1/3 of their interest in the fab for $26 million PROFIT, plus if USC goes public they will receive up to another $40 million. They basically recovered almost their entire investment in USC by selling a third of their interest. On the theory that you can't loose money taking profits, it looks like a pretty nice pop to me. They won all their money back and still own almost 16% of the company. It also looked to me like they took as many losses and write offs as they could possibly think of to off set the profit they took. My shorter term concerns involve things like design losses from major OEMs, new chips being released by two competitors at the same time as S3s new chip, and what the FED will do on May 19th. I don't understand the spin Reuters is putting on those numbers. A .4% increase in wages in one month, and the tightest labor market in 28 years. Looks like trouble to me. The market has gotten complacent enough to absorb a rate hike, where 6 months ago, it would have caused a full blown crash. We'll see, but for now I'm feeling kind of cautious. Short term stochastics are turned down, and I don't like the gaps that were left at the open three days in a row last week. Anything under 7 1/2 will leave the majority of options worthless. Probably a good time to take a nap, hold back some cash, and see what things look like a week from now. Yawn.... Regards, Don