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

To: Bob Howarth who wrote (7656)	9/24/1998 11:28:00 PM
From: Simon Cardinale	Respond to of 16960

Bow: So many things to disagree with. In defense of TDFX management. I hate doing this since I think TDFX hyped stock so insiders could sell but latest drop from say 14 to 8 has a lot to do with the bear market we have entered for small caps and some analysts that got burned from the hype talking down the company prospects. I would say that management between TDFX and nVidia are like two peas in a pod. The engineers ought to revolt, kick out both managements, and combine their talents after hiring a decent management team. I heard there are folks at Gillette and Coke that might be looking. It's funny we could be so different, but my feeling is that the first drop from $34 was a mix of broader market problems (check the Russell 2000 chart vs 3Dfx's) and uncertainty about 3Dfx's future (since Banshee was only in the rumor phase until the end of June. We were all pretty confident that it would pass at any time, but it didn't. Now we've got some legitimate reasons to be down here in the teens. We heard reports of Diamond's inventory buildup but we thought that Voodoo2's strong sales would pull us through. Well, they were strong but not strong enough. Looks like 3Dfx management was also caught off guard probably because Diamond has gone overboard and trimmed V2 stock to the bone, to the point where they're disappearing from shelves relative to Creative's V2 ,and they can't even make direct sales from their website for 12MB boards. As for 3Dfx's management hyping their stock during the big run up, I don't see it. They certainly weren't hyping their projected earnings at that time. Analysts were consistently surprised by 100%. The insider sales at that time were quite typical for this type of company. Now during the most recent fall their projected earnings (call it hype if you like) have been too high. If there were a bunch of insider selling now you might accuse management of hyping the stock to facilitate that, but since insider sales have dribbled off... Comparing management at nVidia to 3Dfx is a little peculiar, too. 3Dfx has been pretty consistent in delivering products that matched their "hype" (if not earnings) while nVidia has been pretty consistent at hitting about 50% of their hyped specs. That's a very different attitude toward the customer, and it's reflected in the attitude the customers and resellers have toward their products. Simon