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

To: Patrick Grinsell who wrote (7404)	9/18/1998 4:00:00 PM
From: Sun Tzu	Respond to of 16960

For certain technical reasons it is not possible to do this. The example is meant only to display opportunity cost. This is why I said that they need to buy the stock in a sell off panic (or load up on it prior to a great news release). Sun Tzu P.S. I two am dreaming of the day that I can buy TDFX for its cash value. But at this point I am not sure what will get us there faster, beating the estimates by 60% or showing a loss instead of profits >:P

To: Patrick Grinsell who wrote (7404)	9/18/1998 4:38:00 PM
From: Simon Cardinale	Read Replies (2) \| Respond to of 16960

Uses for all that cash: I can really only see one use for the cash (other than a protective buffer) that might yield a greater return and that's buying a boardmaker (hopefully Quantum3d). As the price get lower, even this alternative won't be as attractive. How about a big advertising campaign, maybe in cooperation with some big game developers or an OEM? What are the Budweiser Frog boys up to? Can't be cheap. Simon

To: Patrick Grinsell who wrote (7404)	9/18/1998 4:48:00 PM
From: RDH	Read Replies (3) \| Respond to of 16960

Patrick, Very well said. I particularly liked this point: Patrick: "Take the following illustration to see how silly it can get: If we hit $6 per share. I'm going to a bank and getting a swing loan to buy the company and pay off the loan with all the cash 3dfx owns. I will then fire everybody and sell off the inventory and accounts receivable for a hefty profit after paying debts. As I'm firing Ballard I'll tell him, 'I realize you had some other uses for the company's cash. Guess what, so do I.' For certain technical reasons it is not possible to do this. The example is meant only to display opportunity cost." Me: Note, if they bought 1/4 of the shares, the stock would probably come up to around to around 15. They could then sell what they bought, the stock would come back down to current levels and then people would realize, that now TDFX has 12-15% more cash on hand then before the stock purchase, so the stock would come up to around $11 and thereafter always be worth $1.20 to $1.50 a share more than it would have been before (that is if they put that profit in long term bonds and don't squander it). :-) Honestly, they should at least buy back 2% of the stock as a sign of interest in their shareholders. - RDH.