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

To: RDH who wrote (7410)	9/18/1998 5:08:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 16960

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... It gets even better if you note that any money made on the trading yourown options is tax free. There is however the minor issue of SEC rules and insider trading. It gets kind of messy though it is not impossible. BTW I've heard a lot of ignorant comments on various boards (concerning various stocks) where people have suggested the company has wanted the stock price to decline because (a) they've bought put options on it or (b) the insiders wanted to buy the shares at such great values. Both of these statements are stupid, illegal, and impossible to implement. Sun Tzu

To: RDH who wrote (7410)	9/18/1998 5:39:00 PM
From: Michael Linov	Read Replies (2) \| Respond to of 16960

This logic is flawed for a couple of reasons: 15.7M shares outstanding. 1/4 of shares is about 3940750 shares. Company's net worth now is approx. 110K 1. First, the price rises as you buy more shares, so your average purchase price (in the above scenario) would be around $12 a share, assuming neutral investor response... + Commission (1-3%) . 2. Your total cost for doing this would be about $50M. Now, you have 11.8M Shares outstanding. Your book value is now approx. (110M-50M)/11.8M = 5.10. Instead of your stock being held up by a $7 book value, you now have a $15 stock sustained by $5 book value, and only $40M in the bank. Without some real good news, your stock will take a dive. I realize that this is hypothetical, but without a fundamental shift in investor attitude, I think a buyback at this time would be a stupid move at best.