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

To: jttmab who wrote (8048)	10/8/1998 6:36:00 PM
From: David Rosenthal	Respond to of 16960

James, O.T. OK. Short cycle inventory is good, but short to the point that you delay everything to the end of the quarter and risk (and lose) shipping orders that are booked. Not good. Kind of "Almost just in time" inventory management. Reminds me of the Monty Python skit: The Bishop. The Bishop was a Bishop played by Michael Palin who sidelined as a detective. He would always arrive a couple of minutes late to prevent a murder. Dave

To: jttmab who wrote (8048)	10/8/1998 6:50:00 PM
From: Michael G. Potter	Read Replies (2) \| Respond to of 16960

Diamond made a very common error when an inexperienced company is pressured on inventory. They choked back inputs so much that they missed sales. They mainly sell to retail so if they miss a shipment there's a very good chance they lose the sale forever. Diamond made a very bad marketing decision to go with the 8 meg Voodoo2 cards and that started an inventory problem for them. Instead of taking it on the chin and moving the inventory out at a loss (recovers some cash and reduces inventory), they choked input too much and lost sales. I don't think that they'll be buying many Voodoo2 chipsets and that will hurt 3dfx. I wonder how many Banshees they'll be buying as well. Michael