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

To: Sun Tzu who wrote (8323)	10/16/1998 2:22:00 AM
From: Sun Tzu	Respond to of 16960

OT -- Wow! what an impressive raley in Asia. Enough of this dead money business. If I don;t get some good action out of TDFX tomorrow, I'll leave it alone for a while and start trading stuff that move 10% a day, starting with UIS, SUNW, PAP, and TBR on the long side, and FWIW, when the time comes, my shorts will be ko, g, pg, and hwp. ST

To: Sun Tzu who wrote (8323)	10/16/1998 2:30:00 AM
From: Jeff Lins	Read Replies (2) \| Respond to of 16960

Hold it right there Mr.Sun! >>>>"As far as I'm concerned the lower prices are great for 3Dfx. The prices are down due to memory (and I suspect assembly) costs. Not because of drops in Voodoo chips. Based on my guestimates, 3Dfx should ship 700,000 to 1,000,000 units in Q4. ASP should drop to $35 and average cost per unit should be about $25~$29 say $28. So gross profits should be $5 Mil. to $7 Mil. which with a 27% tax rate (stated in CC) should give a net profits of 3.7~5 mil. or EPS of 19~31 cents." Don't think we can take fixed costs (short run) and cost it into a chip when your unit sales vary between 700k-1000k. If ASP is $35 and they sell (high end) 1M units, revs come in at about $35M. If cost per unit is $19, profit contribution is $17, and we break even on costs of $17M. Drop that to 700k and we have a $5M loss. I am also assuming that you are talking V2 and Banshee here. If you are talking V2 only, then your numbers sound quite high. With 700k V2 and 300K Banshee, we should about break even...our R&D is through the roof...not that it isn't necessary- from a longer term perspective. Where does your profit come from? 1M V2 + XXX Banshee? Ballard sure implied that Banshee sales are going to be BIG! Comments make it sound BIG, BIG, BIG! BTW, anybody want to start a pool for when we think SIII goes under? Sun, my guess about the rates: People happy today- tomorrow they start thinking about why the cut was necessary...Down day?