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

To: Patrick Grinsell who wrote (7282)	9/16/1998 2:44:00 PM
From: Simon Cardinale	Respond to of 16960

Here's one that got me laughing: (from yahoo) >>The diffence is that getting the money from revenue by selling a product is indicitive of future earning. They should continue to get that revenue. Winning it in a suit is a one time extraordinary credit on their balance sheet. They have the cash to work with but they obviously can't expect to make that type of income in the future.<< True, but it seems that in this industry the same can almost be said for their products An interesting perspective. Simon

To: Patrick Grinsell who wrote (7282)	9/16/1998 2:50:00 PM
From: Patrick Grinsell	Read Replies (2) \| Respond to of 16960

On why 3dfx can't turn a profit... It would seem that the Fool agrees with me about the company not turning a profit right now. The reason for this is fairly simple. Expenses are to high. Operating expenses have tripled from 5 million to 16 million in the span of one year. This doesn't look to decrease with the new marketing campaign. If 3dfx got a low of 30M per quarter at 40% margin they could keep their heads above water by shooting at a 12M cap for their total expenses. S3 made 53M in revenue last quarter and burned almost 29M on operating expenses. I don't want 3dfx to become another S3. Some of you may argue that revenues will be higher than just 30M going forward. I say bull. If that were true they wouldn't have flat estimates for next year. If 3dfx plans on similar revenue levels for next year then the total expenses should reflect that reality or they should change the way they do business (make the boards, decrease cycle times, etc.). Pat