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

To: Michael G. Potter who wrote (8868)	11/8/1998 2:41:00 PM
From: Marc	Read Replies (1) \| Respond to of 16960

FORBES DIGITAL TOOLS 11/05/1998 forbes.com November 5, 1998 Is Creative Technology buying 3Dfx? By Om Malik Why did the San Jose, Calif.-based graphics chip maker 3Dfx Interactive (TDFX) adopt a shareholder rights plan on November 3? Routine corporate decisions? Or was there a hostile bid in the making? On Tuesday of this week, the board of directors adopted a shareholder rights plan that, under certain circumstances, will entitle shareholders of the company to purchase shares of 3Dfx common stock at a discounted price in the event that any person or group acquires 12% or more of 3Dfx Stock. 3Dfx's biggest customer, Singapore-based PC multimedia product company Creative Technology (CREAF) has snapped up more than 6.5% of its shares over the past two months. According to a recent 13-D filing with the Securities and Exchange Commission (SEC), as of October 19, Creative owned 1,013,100 shares of the Issuer's Common Stock, representing approximately 6.5% of the 15,575,629 shares of Common Stock outstanding as of July 31, 1998. Is a hostile bid in the offering? 3Dfx Interactive spokesman Steve Schick says no and adds that the company is not aware of any such move, and views the investment more as a strategic investment by Creative than a takeover bid. John Danforth, general counsel for Creative Labs, the U.S. subsidiary of the $1.4 billion (sales) Asian technology leader, concurs. "This is simply a strategic investment in a key supplier," he says. The San Jose, Calif.-based company makes high-end graphics chips. A graphics chip is the "projector" of a PC. It takes images and renders (or displays) them on the monitor. The better the graphics chip the higher quality of the image. 3Dfx's Voodoo chip is even more focused than most--it makes playing videogames on personal computers, faster, more detailed--and most important--more fun. According to Danforth, 3Dfx stock was cheap and the company snapped up the shares because they saw value. Creative acquired the stock in the $8.48-$12.91 a share range. 3Dfx has seen its stock skid from a 52-week high of $35.75 to $8.81 before inching upwards to close at $14.25 on Wednesday, November 4. 3Dfx has come under steady selling pressure after it missed its third-quarter earnings. On October 16, the company reported sales of $33.2 million, down from $58 million in the previous quarter. For the same period in 1997, 3Dfx earned $10 million dollars. Before one-time gains, 3Dfx lost $8.7 million, or 56 cents a share. Silicon Valley insiders say that Creative might be playing safe, because of the chance that 3Dfx might buy another rival graphics board maker. In related developments, 3Dfx is expected to launch its next generation 3-D graphics chip at COMDEX, the computer industry's biggest trade show in Las Vegas, Nev. The Forbes Digital Tool has learned that the chip which is code-named "Avenger" is three times as powerful as the Voodoo2 graphics chip. The product will be available sometime in 1999.

To: Michael G. Potter who wrote (8868)	11/9/1998 1:07:00 PM
From: Sun Tzu	Respond to of 16960

ps - As for the "Slash" posts on Yahoo, they are similar in many ways to what Sun Tzu posts... Sure, I stop reading the net over the weekend and this is what I get hit with on Monday!. There are huge differences between slashNscalp and I. For one, I don't think I can guarantee turning $10 million into $40 million in a couple of months and he does. But more to the point, Slash's posts are out-loud thinking of possibilities rather than straight predictions. For example both he and I thought that TDFX is due for a minor consolidation. This was fairly obvious from the way the stock had come up and was approaching the resistance level. Keep in mind that he did not say that the stock would consolidate tomorrow (as many on the MF fool credit him with), only that there is a fair chance for it to do so and that it would be healthy. Fair enough, but this would not do zip for me or for most TDFX holders. This is because Slash is a scalper (scalping is a day trading method where you try to capture 1/8 to 1/4 moves on each trade without commiting to either side). I am not much of a trader to begin with as I have a full time job, but when I do trade, it is a position trade. This means that I try to capture 20%+ moves over a 1~3 week periods. The rest of the time I am a medium term investor. Both of these mean that I have to enter my positions much more carefully than Slash and I actually have to make solid predictions about the future because I'm not sitting by the knight ridder machine to reverse course the moment it moves against me. Don't get me wrong, as I said before, Slash does come up with good points many times. I just don't see those points apply to my way of trading/investing very often. I think I do a lot more research than Slash, because I have to take on more risks than him. And I invest in a way that lets me hold on to a full time job. As my reward, I get to capture much bigger moves in the stocks. Time horizon makes a lot of difference in how one buys and sells stocks. Sun Tzu

To: Michael G. Potter who wrote (8868)	11/9/1998 4:52:00 PM
From: Simon Cardinale	Read Replies (2) \| Respond to of 16960

Michael: Sun and slash Actually I've believed that they're the same person for several months now. (If I'm wrong my apologies to Sun.) Slash has stated that his strategy calls for setting up a long time bull who will change directions after a big runup. It adds a grain of salt to my reading of Sun's posts that I'd prefer to not have, but I can't avoid it. My feeling is that it doesn't matter. His(their) analysis(es) is(are) worth the same either way. :) Simon