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

To: Pierre-X who wrote (4033)	6/16/1998 8:23:00 PM
From: Jay Fisk	Read Replies (2) \| Respond to of 16960

A couple of random news bytes (ok. . . bites) Dell's VP mentioned on CNBC that they're forecasting "less than 7% of overall Dell PC's shipped this year" to be less than $1000. The attitude shows. Subject Two: Fab capacity constraints, as in TDFX can't have the capacity they need, was answered by TMSC three weeks ago, when they reported "less than 80% of capacity utilized" with a forecast that reeked of doom. This effectively negates the "production capacity" arguement, IMO, unless they forgot to order enough to meet projected demand. With two weeks to go in 2Q, I'll bet they're loading those trucks!

To: Pierre-X who wrote (4033)	6/16/1998 8:31:00 PM
From: jttmab	Read Replies (1) \| Respond to of 16960

Pierre, IMO, when it comes right down to it there are really two basic positions on the stock (with uncountable options based on "what ifs"). As concisely as possible.. A. The seemingly deduced opinion of the analysts (and a I gather that you generally lean towards this view) is that because of a combination of factors, including limited 3D utility, competition, PC price erosion, etc., that TDFX has limited revenue growth and earnings potential.(As seen be the basically flat, quarter to quarter, earnings estimates for 1999. B. A different view (encouraged by Ballard with his subjective comments on 1999 sales) is that TDFX will be able to execute a bowling pin strategy and move into the 2D/OEM market (and still maintain dominance in the 3D market). The argument would be that PC developers will attempt to highlight performance to shift as many consumers as possible from the low-end (Sub-sub-$1000) to higher end, i.e., higher margin systems. Different levels for a Banshee board and a Voodoo board. If the branding strategy is truly successfull, it should enhance the tactics above. If there are additionaly 3D applications beyond gaming that we collectively cannot envision all the better. We can review every press release (competitors), churn out estimates to any "precision" desired. But those estimates are fundamentally inaccurate, because none of us knows, or can know, how the strategies will actually play out. I for one, don't even think that it is clear, whether Direct X over Glide will have any significant bearing on resultant sales....Does anyone know, absolutely, whether Y2K will result in nothing more than a surge in PC sales? Or will it result in a global market correction downward of 40%. If one believes that option A is more likely, there is no reason to hold this equity, if option B is more likely than the better the opportunity. Best Regards, Jim