To: Chip Anderson who wrote (5804 ) 7/27/1998 12:19:00 PM From: Sun Tzu Read Replies (2) | Respond to
WANTED: Diehard TDFX Championsway too quiet for a great growth stock that has fallen 60% from its high for no good reason) and (d) lack of institutional support. I've stated these in the order of my precieved importance.(1) Unreasonable TDFX longs As a person who cares about his financial health you may think that convincing everyone of how great a buy TDFX is, is the best way to get the stock going up. This is true most of the times but not here. There already is a great enthusiasm surrounding this stock, and many people have pointed out what a great business model 3Dfx has. The problem is unresonable expectations of some TDFX supporters. The expectation is what moves the stock. In theory this should be only expectations of earnings, in reality it is also the expectation of stock price performance (as evidence to this go back look at the posting of people who dropped the stock after the good earnings report simply because the stock dropped). Here are some of the ways that this irrational expectation and how it affects you.(2) The shorts In a way dealing with shorts is easier than dealing with the problem longs. As a first and most effective step, call your broker and ask for your share to be delivered to you. This will cost you a few dollars (alot less than a 2 point drop in TDFX) but it means that your shares will not be lent out to the shorts. If enough people do this (ie you are willing to go the extra mile and push for this on other boards) then given the current short position, you can trigger a short squeez and push the stock higher.(3) 3Dfx Management The 3Dfx management seems to think that if they hold a good conference call with the analysts (and junior ones at that) and deliver better than expected earnings, then the stock will fly sky high. Beyond that they are unwilling to address the expectations and fears of their majority holders (i.e retail investors). As we have seen in the past two quarters, this is not always the case. And even when that does happen, TDFX will not recieve the full multiple that it deserves due to its precieved volitality.You need to bring it to their attention that they should get involved in the Chat rooms. It is a lot easier and more cost effective to once a week make a post on various chat rooms on keep people upto date and make sure that the expectations are in check, than to respond to 50 phone calls a day. Try to gather concenses before hitting them with suggestions. Emotional statements and threats will not cut it. Nor will impractical advice and given that most of us have little experience in the business of TDFX, many of our suggestions will be impractical, but we can make them more practical by discussing it before presenting them. We need to do this for other boards as well.(4) Institutional Support Once the above is done and the stock has stabilized, the institutions will be willing to step in. (once again, they will not be caught catching a falling knife on a small cap in a competative market. The stock has to stabilize before they step in, no matter what the valuations). 3Dfx management can then be persuaded to hit the road and talk to various fund mangers to buy their shares.
