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

To: Harold Engstrom who wrote (5820)	7/27/1998 3:09:00 PM
From: Sun Tzu	Respond to of 16960

Harold wrt suggested game plan you said: 1. Non-factor. This is as important as the conspiracy of the market makers. Everyone is looking for a reason. Maybe there isn't one. You may be right. Still when the stock drops 35% after the earnings report, there can be only one answer: more sellers than buyers. The engineer in me can't stop trying to figure out why there were more sellers than buyers, given that INMNHO the earnings beat any reasonable expectations. To that end I came to the conclusions you saw in that post. What can I say, engineers are by nature problem solvers and I cannot easily accept the "there is no reason" answer. 2. Short interest is a short-term issue only. That depends very much on how you define short term. As I said before, if the fundamentals remain as good during the next 18 months as they are now, then it is most likely that the stock will shrug off its current undervaluation and trade at much more reasonable levels. But there is no garantee of that. In fact if anything, time will most likely work against you on a macroeconomic level (for the remainder of this business cycle). So there can be a much steeper hole to get out of than it looks now (that is a scary thought). Of course if your investment horizon is a lot longer, then your point is valid, but not everyone can keep the faith for the next 3-5 years. In any event, what is lost from trying to get as much out of your investment by using all your resources? 3. I don't want the management of the companies I own to sit up and beg every time their stock takes a beating. If management is focused on their core business, that is what will return value to shareholders in the long term. This chat group stuff is a waste of a company's time and opens up liability issues. Why respond to what every guy with $20 for a modem is worried about? Here our difference is one of scope of involvement. I don't want the management to "sit up and beg every time their stock takes a beating" either. Not only it is not right, it is not even practical and as you've pointed out there are important legal ramifications. What I am saying, is that I've noticed that there is relatively very little news on TDFX and that there are a lot of TDFX share holders out there who do want to hear as much as they can about their company. Like it or not, you are (we all are) in same boat as them. If that crowd decides to rock the boat, you and I will get sea sick along with them. Making a few posts a week on the net and answering a few selected questions, is a lot more cost effective than trying to get back to every frustrated (and sometimes emotionally distraught) share holder who calls the IR department. 3Dfx should be more active in releasing news which is at least somehow related to them. This is not as difficult as it may seem. Every week there are industry reports on the future of graphics industry. For example during the past 2 business days, Bloomberg news has made the following observations: The market for 3D-graphics chips is the fastest-growing in the semiconductor industry, according to Jon Peddie Associates. It's expected to double this year to 82 million chips shipped worldwide. By 2000 that number is expected to exceed 142 million. ''This is one of the roughest segments in the PC business,'' said Ed Buckingham, an International Data Corp. analyst. ''Every quarter, someone comes out with something better.'' and elsewhere it said: When word hit the graphics industry that Intel was about to release its 3D chip, ''There was general concern almost to a state of panic in the industry,'' said Mercury's McCarron. ''The reality is, it is a very good product,'' he said ''But it is not one that would wipe everyone off the face of the earth. At least not yet'' There was also other news in which an analyst recommended buying a basket of TDFX, TDDDF, INTC, and ATY.TO as away of being sure not to mis the 3D bandwagon. The 3Dfx PR machine should at the very least repost these news items where they will be read by most people while sighting its source (and thereby avoiding legal hassels). It is not reasonable to expect everyone to dig out all the info every day. Nor does it hurt them to come out and state that there has been no negative news to warant a sell off and that they are staying the previously stated course, when there is a massive sell off. And they should keep us in touch with the product developments. As a share holder you should not have to wait for the official (and highly anticlimatic) release of Banshee (and right now on Rampage) before you get any detail on the specs. This kind of silence plays right into the hands of those who would benefit by waging a fear campain against TDFX. 4. Institutions will do what they like. For most, TDFX is a long way off the radar screen. Wait until they become a company with a large-enough market cap to warrant institutional scrutiny before holding your breath for the institutions to buoy your TDFX holdings. Quite simply not so. There are small-cap and value funds out there whose mandate not only let's them, it almost requires them to buy TDFX like companies. The management should get in touch with them and bring the value of their stock to their attention. The fact that there is value in a stock means nothing if that value is not released in a timely manner. Regards, Sun Tzu P.S when I say TDFX I mean the stock. 3Dfx is the company.