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

To: Stuart C Hall who wrote (8454)	10/19/1998 3:11:00 PM
From: Patrick Grinsell	Respond to of 16960

Management has had their chance to outlay a future and address major issues I have to say, "what has changed?" Great question. Well, we learned that the "softness" in Voodoo2 sales was not as bad as we initially suspected because it was due almost entirely to Diamond. 3dfx is now checking the channel directly to make sure they don't get blindsided by these guys again. Also, the write down in inventory is 4.5M in "free money" should 3dfx sell more Voodoo2 than anticipated. (4.5M is about 25-30 cents per share.) The additional 20 people in Austin have me convinced they are indeed working on other markets and not just giving lip service, in addition to Seller's comments about a holiday product announcement. Since Banshee sold about 10M last quarter (in 1 month) it is easy to extrapolate that we can expect at least 30M for 4Q, with 2/3 of these sales going to non-retail channels. I would also point out that the company said initial sales were production limited so we should definitely see above 30M in sales. New lower prices are having an effect on sales (up to 4x in some cases) and I've noticed Voodoo2 climbing back up the shopping.com charts. All-in-all, I have found that 3dfx is a more stable company than I believed before the conference call. I now believe it's probable they'll make a mild profit this quarter. That said I find the prospects of Q1, the lack of a real road map, as well as the lack of Banshee OEM's still dissapointing. Pat