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

To: Patrick Grinsell who wrote (5998)	8/4/1998 5:51:00 PM
From: Mike Sesan	Read Replies (3) \| Respond to of 16960

TDFX lawsuit settled. biz.yahoo.com Mike

To: Patrick Grinsell who wrote (5998)	8/4/1998 8:33:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 16960

Pat I thought only bear markets were made illegal. Are you telling me that business down cycle is banned too?! :-) 3Dfx does not have to be doing anything wrong to be caught in a bad situation. It is enough for their competition to be ssssllloowly going into bankruptcy. That would force the competition to sell their product at or below cost while gasping for air, and would put a lot of pressure on 3Dfx's profitability for quite some time (look at Micron and Asian DRAM makeres for an example). Nor does 3Dfx have any control over the business cycle. There has never been such a prolonged expansion in US history (on record anyways). In my opinion this makes it more likely than not that the expansion will come to an end within a year. I think the economy is walking a tight rope between inflation and deflation. It may not fall any time soon, but it makes me too nervous to make any big bets on the continuance of the expansion. There were dozens of great "high tech" companies in the early and mid 80s that are not around anymore. Mostly because they ran out of cash. It's a pity that 3Dfx has not issued bonds. Reading what S&P would say on their debt rating could be quite sobering. In fact, if you ever want to hear an unbiased bearish case for any company, go read their debt rating analysis. Next topic. I was on the phone with 3Dfx last week and I explicitly asked them if they are moving to the ATI model. I got a resounding no for an answer. So the issue of STBI buy out is moot. They did however say that they have considered that model and when the follow up to Banshee comes out next year (targetted only to OEMs), they will ask each OEM if he prefers 3Dfx as the supplier or one of the card makers. I guess we'll have to wait and see how things will unfold next year. Sun Tzu