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

To: Gravitar who wrote (7137)	9/14/1998 5:55:00 PM
From: Simon Cardinale	Read Replies (3) \| Respond to of 16960

Ouch! But is there a silver lining? The downside of this latest PR is mostly obvious, so I won't comment too much except to say that we may see smaller investors drop out, who thought that 3Dfx was destined to make money every quarter. So what good news is in the PR? 1) Off the shelf sales are extremely strong, so the build up in inventory should move quickly in the holiday season. 2) The paragraph: The company's newest product, Voodoo Banshee(TM), began production shipments in mid-August and has received a positive response in the market. The performance advantages and the 3Dfx brand and content position, have resulted in unannounced design wins with top Tier 1 and Tier 2 PC OEMs for Voodoo Banshee. Volume OEM shipments will commence in the fourth quarter of calendar 1998. pretty much speaks for itself. Banshee is on track to take a chunk out of he OEM market. 3) The sentence "due to the recent Sega litigation settlement, 3Dfx still anticipates that its third quarter will be profitable" tells us that the Sega settlement is for more than "several million dollars" (whatever that is). Overall this is very disappointing, though not totally unexpected. 3rd quarter is usually very slow in the PC industry, for those not already aware. The thing that worries me most is that the analysts were so far off again. They were hit by two 100% surprises, then they got it about right, and now they've got another 100% surprise (though in the other direction.) This means that the analysts still aren't communicating too well with 3Dfx management. This has serious consequences for big-money confidence in the stock and their own ability to predict the company's future (already seriously in question.) Simon