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

To: joel3 who wrote (8945)	11/12/1998 10:50:00 AM
From: David R. Parker	Read Replies (1) \| Respond to of 16960

Follow-up article at thestreet.com This was in yesterday's thestreet.com, is a follow-up to their earlier writing. David -------------------------------------------------------------------- Silicon Valley: AEA Conference Notebook: Visual Networks, 3Dfx By Cory Johnson and Marcy Burstiner Staff Reporters 11/11/98 10:58 AM ET SAN DIEGO -- Shares of Visual Networks (VNWK:Nasdaq) were on a sugar high Tuesday after the company promoted its presentation at the American Electronics Association Classic Conference by passing out free Mrs. Fields cookies. But it wasn't just the cookies. A presentation by Visual's CEO Scott Stouffer and CFO Peter Minihane had investors chattering about the maker of phone network software. Shares of Visual Networks added 5% to close at 29 1/2 on 684,600 shares traded, more than five times average daily volume of 128,000 shares. "We haven't done much to get our story out to Wall Street," said publicist Angela Tandy. "But now we're starting to put some effort toward that." The Street, represented by the hundreds of fund managers and analysts here for the AEA show, was all ears. Visual Networks makes a tool called Visual UpTime that helps packet-based networks operate more efficiently. Packet networks are far cheaper than old circuit-switched networks, but as any Internet user knows, the Internet can't always be counted on. "The Net is still not reliable," said Stouffer. "And to add the necessary reliability isn't cost-effective -- you have to have highly skilled personnel throughout the network. That's why there isn't a single Internet provider, except UUNet, that has made a dime." Enter Visual UpTime. The product resides at every intersection (or port) of a frame-relay network -- kind of like an army of robotic traffic cops for the network roadways. "Because we put this instrumental fabric underneath the network," says Stouffer, "you can centralize and leverage those highly skilled tech people and optimize the network." This means passing the buck -- "Nope, the problem isn't here at AT&T, check Bell Atlantic" -- ends here. One technician can see exactly where the network problem lies. Ultimately, Stouffer's goal isn't a big piece of the frame-relay network pie. His goal is the pie itself. Stouffer thinks that in the next three years, his company can realistically achieve near-total penetration of newly installed frame-relay networks. Visual Networks once sold products to the major users of big networks, like Federal Express (FDX:NYSE). But now Visual Networks has graduated to selling to the networks themselves, the AT&Ts (T:NYSE) of the world. "When fully matured, we think we can achieve 70% to 100%," says Stouffer. "Today, just two quarters into this with AT&T, we're about 15% of new port penetration." This news went over even better than cookies and milk. Steve Kohn, an industry analyst at Soundview, was still raving about the company an hour after seeing the presentation. "Visual Networks is one of the big stories of the day." So what's the next hot scoop? Well, Microdyne (MCDY:Nasdaq) was giving away Ben & Jerry's Cherry Garcia and Coffee Heath Bar Crunch ice cream in the hotel lobby Tuesday. If it goes the way of Visual Networks apres cookies, look out. 3Dfx's Breakthrough Day At last some good news for investors in 3Dfx (TDFX:Nasdaq), the 3-D graphics chip maker. CFO David Zacarias told money managers that its new high-performance graphics chip, Voodoo Banshee, will be offered as a standard feature in Gateway's (GTW:NYSE) G and GP desktop computer lines. Gateway has been offering the chip as an option to its customers since July, but the new design win represents 3Dfx's first major step into the mainstream market, a move it has long sought. The news boosted a stock that has tumbled from a high of 35 in April to low of 8 in September. At that level, the stock was so low that even an $8 million third-quarter loss couldn't push it down further. The broad rally in semiconductor stocks brought it back up last week to 14 1/4. Yesterday it jumped another 13% to close at 15 15/16. Zacarias said that with the Gateway deal, the company will ship some 1 million Voodoo Banshee chips this quarter, up from just 300,000 last quarter. Until now, the company has primarily sold through the retail channel to game enthusiasts. "We're moving into the performance end of the PC market, for the guy who wants to be able to play games on the PC but isn't a game nut," he said. Zacarias promised he'd announce deals with other computer makers in the next six weeks. The news has come as a relief to 3Dfx shareholders, who tend to flood Motley Fool and other Internet chat boards whenever the stock moves. "Wow!" said recent poster JSPADAFORA when the stock hit 16. "I'm actually in positive territory with this stock now."