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

To: Sun Tzu who wrote (9690)	12/16/1998 3:10:00 AM
From: Patrick Grinsell	Read Replies (1) \| Respond to of 16960

Sun, One of the things you were concerned about was the reduced retail presence. This is also a concern of mine. I ran my numbers through a spreadsheet to find some breakeven scenarios and here's what I came up with: Basically, it looks like 3dfx will hold even in EPS (basically making the merger earnings neutral) if they see a reduction in volume by 40% as a result of the merger. I firmly believe that the retail presence is almost entirely generated by 3dfx, and not their vendors. This wasn't necessarily true back in the old S3 days. Remember the name "stealth"? Most people did, but they had no idea of the chip behind the board. Things have changed and the technology is now the focus. My guess is that the trimming of the pipeline will result in a 20% decrease in volume shipments. I salivate at the possibility that rampage may retail for even more than $300. They'd probably be making at least $150 per card...(That's 10 times what they are making on Banshee per unit right now!) Pat