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

To: Patrick Grinsell who wrote (7210)	9/15/1998 11:38:00 AM
From: Michael Linov	Read Replies (3) \| Respond to of 16960

I'll try and take a crack at this. There is certainly more than one factor in play here. We're forgetting that we are paying now for next quarter's profits. All the R&D for Banshee (and Rampage) is being done (and paid for) this quarter. Coupled with low seasonal demand, and high-prices (Diamond and Creative did not significantly lower the price of their V2 models), chip sales for this quarter simply couldn't carry the load of all new expenses coming on board. I suspect the 2-4 week delay of banshee didn't help much either, as the quarter was already back-loaded. Why does this matter? It doesn't. Any back-end earnings will be more than made up for during the holiday season, and the introduction of banshee. Sell through of the V2's will take place regardless, and the demand will pick up. If 3dfx doesn't have to drop prices to do it, so much the better.