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

To: Joe C. who wrote (7166)	9/15/1998 12:30:00 AM
From: Jeff Lins	Read Replies (1) \| Respond to of 16960

This is BAD news. No way to look at other than baaaaad. I am VERY UPSET. As Patrick pointed out, I spoke with DZ only a few weeks ago, 2/3ds through the quarter. I was assured that things were ok. I posted all of the info, and ended with the following comment: "Frankly, IMHO, I don't see how they will make estimates unless Banshee does very well. I believe that TDFX is quite confident in Banshee, and they continue to state that they "are very confident of Banshee as an OEM part"." What little research I had done had shown a slowdown in sales. STBI made it clear that they had enough inventory. DIMD had said that they refused to lower the price of their board, and had therefore not sold as many as they had planned (by a fe hundred thousand..). They clearly had inventory. Shopper.com rankings (hmm...seems that it may just be somewhat accurate after all...) fell. Yet TDFX themselves failed to acknowledge any of this. Big back to school season. What a load of crap. What is with the Banshee and the fourth quarter thing? What will inventory look like? Possible explanation: orders dried up to make room for TNT and other cards? Perhaps since TNT is not up to snuff, V2 will again come to the front of the pack? Good news: Sega deal was cash, and evidently a decent amount. Stock price is quite low at the moment. Solid balance sheet, new product, imminent OEM deals (?) and our best season coming up should soften the blow. I think we will take out the 9 1/8th level, hit the low 8's and close in mid 9's. This will be exactly what happens :^) as I am a God. (the God of bad investing- Lose-icus). When the Sega news hit, I was buying big. Tomorrow may just present a decent buying op.

To: Joe C. who wrote (7166)	9/15/1998 12:38:00 AM
From: Obewon	Read Replies (1) \| Respond to of 16960

<<BTW: We are getting towards the end of the quarter and earnings warning season is full upon us. The silence so far from management indicates that previous guidance still applies of flat earnings and dropping margins due to Banshee. The lack of announced OEM wins though makes me wonder who is buying all the initial production Banshee chipsets which are supposed to be between 10-20% of revenues in 3Q98.>> Did I actually utter these words just two days ago?!? What a difference two days bring. Management has just lost my vote of confidence with their recent announcement and I'll be bailing at the bell tomorrow morning. The release failed to convey any concrete positives for the company except possibly for the fact that the settlement is a significant bunch of cash. While Diamond expressly stated at the beginning of the quarter that its demand for 3Dfx's chips would significantly decrease, management assured investors that sales would remain flat and continued in that vein until today (at least with individual investors like myself). Sell though on the boards has remained pretty constant from the independent investigations I have done so it appears that 3Dfx management's expectations of further sales and excess inventory is to blame. By failing to aggressively counteract the outrageous claims Nvidia has made in the past three months concerning the TNT, management allowed the market to become paralyzed with indecision. Take a page from military tactics - ATTACK! In this market, waiting for the competition to come and knock you down off your mountain will not create long term prosperity. You are only as great as your latest product in today's market and while the Banshee is good, it is NOT great (in the sense that Voodoo II was great). I will probably reconsider my position sometime in 4Q98 depending on what kind of reliable info I can find that indicate that management is not resting on their laurels and is serious about dominating the industry instead of just competing in it. OB (One very disgusted investor!) BTW: To all you other disgruntled 3Dfx investors out there, a word of advice: I accept this as a (very) painful lesson in investing so don't come looking for my support with any stupid shareholder lawsuits because you won't get it from me. Only one party really makes money off these suits and it not us investors.