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

To: Matt Webster who wrote (7509)	9/22/1998 1:48:00 AM
From: Patrick Grinsell	Respond to of 16960

3dfx should NOT buy Nvidia... Let me clarify my opinion here. Nvida, like 3dfx, contains almost it's entire value in the talent pool of individuals working for the company. The only thing they do is design chips, so the designers are the core revenue generating assets. If 3dfx buys out Nvidia here's what they also get: 1) Nvidia debt 2) Nvidia lawsuits 3) Nvidia obligations It's alot easier to pay their designers a premium on what they are currently earning. This is a job for an aggressive HR department, not M&A. Nvidia has about 40 people. Even if the average salary if 100K a piece, that's only 4 million annually. Of course you only need the 10 or so enginneers (just guessing on the number), so 1 million per year. Compare this to the over 9 million in shareholders equity that would have to be laid out for the entire company. The actual price of the company would obviously be much higher, but the 9 million would be a minimum. At the $7 per share they were quoting STB that puts their fully dilluted market cap at $175M. And a final note, just because 3dfx buys Nvidia doesn't mean the Nvidia employees won't jump ship. If 3dfx feels that buying their own stock is a waste of time but buying Nvidia stock is not, they should probably have their heads examined. Pat

To: Matt Webster who wrote (7509)	9/22/1998 2:15:00 AM
From: Jeff Lins	Read Replies (1) \| Respond to of 16960

Matt: We could care less what people sell their TDFX based cards for. Hell, the lower the better. Naturally we want them to make money so they keep it up, but ultimately we sell chips for our price. Once we sell 'em, it doesn't matter what the heck they do with them. TDFX has been making lots of money, and has a bunch in the bank. Even if this pricing war was as bad as you think, TDFX with its substantial war chest has the most to gain long term. TDFX can't buy nVidia. They have cultures which clash on many levels. One TDFX insider said that it was a certain impossibility. They could well become the next ATI without nVidia. Banshee too late for x-mas? Banshee has been shipping in volume for weeks. It is a done deal. They WILL be in OEMs. You are correct that the industry needs to consolidate.