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

To: Anthony Maza who wrote (4635)	6/24/1998 12:09:00 AM
From: c-horse	Respond to of 16960

Frame of reference For a hummingbird, we operate at a mindnumbingly slow pace. To a tortoise, we are unbelieveably speedy. It's a matter of perspective. Management's job is absolutely the increase of shareholder value. But on what time scale? Obviously not every 5 minutes or every day, and certainly something faster than geologic response. Probably from an annual or quarterly perspective. As a tech company, what can be gained by wooing analysts? Probably some stability in the stock price - reduced violence of price fluctuations around the price trend. And my opinion is that it's a matter of opinion as to how much effort you want "management" spending on this activity. As TDFX "ages" as a company, there may be some increase in the P/E multiple because of reduced variance in the price around the long term trend. That's pretty irrelevant at this point and for the next couple of years, again, imho. My personal opinion is that they should spend their time at the annual level of granularity, not the quarterly. I think that oems will only care that TDFX is stable and capable of supplying quality product (once they decide for technical and financial reasons that they want a given TDFX product). As long as the volatility of the stock price is not so high as to make TDFX look undesireable as a supplier, it shouldn't have an impact on the medium term business prospects. Analysts have to base their estimates on market acceptance of the banshee and perceived ability of TDFX to execute (and other products), not pure technical specs. So until oems (oem = board maker, in the context of this email) announce boards using banshee, that analysts believe will be purchased by boxmaker oems (probably by announcing contracts with boxmakers), the analysts won't have a compelling argument to change their tune. It's human nature to not have to rationalize an opinion, but most people have to justify reversing an opinion. Analysts know that there is plenty of time for fundamentals to change and allow them to revise their estimates - they don't need to be the first ones on the block to "change" their minds. From my perspective, TDFX appears to be a spring, being coiled up with potential energy (every day that earnings increase and the p/e goes down and the rate of p/e growth increases and the price of the stock goes down creates more potential earnings growth. Btw, I'm a trader/investor (that means I irrationally sell and hold, based on whimsy, and I can rationalize either in any case) who just dipped his toes in the water with a small position last week. I'm watching more closely now, and expecting that I will invest more in the near term. C