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

To: jttmab who wrote (10063)	1/8/1999 10:40:00 AM
From: Harry J.	Respond to of 16960

Jim -- I agree with all you said. It's been awhile since I saw an IPO that explicitly said, "A portion of the shares sold represent sales by insiders, and the proceeds will go to them instead of the company," but it happens. Also, on the dilutive effect, you are also correct that I didn't tell "all of the truth." The draft RegStmt does mention that those 14 million insider shares currently held cost $1.25 apiece and become 26 million insider shares pro forma on and after the IPO (or about 14/26ths of $1.25 which is about $0.67? Can I figure the value that way?). I guess that means that, on the day of issuance, and presuming an issue price of, oh, $8, each of the 26 million insider shares would have a value of $8. So, the one day (albeit unrealizable for now) insider cap gain per share is roughly $7.33 (but may be as little as $6.75). Not a bad rise on a $0.67 (or $1.25, depending) investment while I'd have to put up $8 to get the same equity ownership. Nevertheless, I recognize that what may appear to be a windfall really is the officers to some extent being compensated for their "active" role while I'd just be a passive owner depending on the kindness of strangers hahaha. I do know that I prefer buying on fundamentals to buying on "spec" which is why I ended up here at TDFX via STBI and look forward to holding TDFX. It's also why I downloaded and read the whole draft RegStmt for nVidia. Is amazing what companies tell you about themselves and their competitors if you can wade through the small print. Just a personal view, of course. Regards, Harry