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

To: William T. Katz who wrote (5993)	8/4/1998 5:18:00 PM
From: Robert Grist	Respond to of 16960

This stock is solid. (Down Today .. -3/16).... (How much is that? .. on a day like this?) and .... it is... fun to own...

To: William T. Katz who wrote (5993)	8/4/1998 5:30:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 16960

William you tempt me to run another set of screens to gauge the carnage, but I think I've said enough on that. From a technical perspective there are some positives emerging for for TDFX. I've never been one to care much for "looks like about to give positive signal" kind of statement, especially in a market like this one; I'd rather see the signal and then wait a bit just to be sure it's not a false one. Still, here are a set of things that all in all paint an improving picture for TDFX. 1) The volume has been shrinking and the stock is stabilizing (a drop of 2% is more stable than 9%). 2) The sell off in the big caps is a positive in the medium term if they fall less than 15% and stabilize. This would scare some investors from the big caps into the mid caps. TDFX is considered a micro cap, but any shift in that direction is a positive. 3) There is a divergence between MACD peaks and bottoms and the stock chart's corresponding peak and bottoms. This is a great sign of consolidation, though it is vague on its timing. 4) I expect TDFX to report around 51 cents a share in Q3 (fully taxed, fully diluted), but much better results in Q4. This should flush out a lot of "irrational" investors. There may be a short term sell off followed by a recovery, and the stock will be in the hands of longer term investors and institutions, which in turn will bring about an up trend. 5) The two best pieces of news that I heard in quite sometime on TDFX were that the management is actually trying to improve on its PR and that it is actively looking for institutional supporters. They will face an uphill battle, but this is still far better than the existing situation. ================== MUEI had revenues of ~$341M in the last quarter. My quick and dirty math tells me that is about 341,000 units or ~5,250 units a business day. based on this the Voodoo inventory does not seem out of hand. The site provides a great indicator of TDFX's sell through, if anyone is willing to keep taps on it. ================== Last week I heard a technical analyst on CNBC emphasizing the importance of Dow 8776 support level and how its breach would push down DJ to 8400~8500 level. Today I kept remembering his remarks and wondering how much of the day's action was a self fulfilling prophecy. Another 20 points drop in SP500 without a quick recovery would be very bad for the over all market. SP500 of ~1160 is needed for the resumption of uptrend. Just the same I'd rather see a massive sell off and a back to normal situation than a Chinese water torture. ================== I don't think 3Dfx should spend their cash on anything right now. No stock buy backs, no dividends, and no mergers. Not that any of the above are bad things to do with the money in a normal situation, just that the current environment is far from certain. 3Dfx is young and small company in a very competetive and cyclical business. 3Dfx's product is completely a discretionary item and an economic slow down or the public's perception of "poorness" (say due to falling stock prices) will take a big bite out of their revenue. The cash can mean the difference between life and death for the company (litterally) should such a slow down occur. Sun Tzu