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

To: benwood who wrote (12453)	5/11/1999 5:05:00 PM
From: Sun Tzu	Read Replies (2) \| Respond to of 16960

>> I suspect your suggesting...would have been illegal. I would never endorse an illegal or a dishonest action by anyone. I was not suggesting a secret merger with a later public announcement. My point was that they ought to have been discussing this for a few weeks if not months. Then once the major points were agreed upon, then while the rest of the merger was being negotiated, they should have tried to sign up the sales contracts, even at a discount. The buyers could not have been too pissed off, since they were getting good boards in time for Christmas sales. nVidia, would have noticed the loss of contracts to 3dfx and Diamond would have noticed the TNT competition from STB, but they could not be certain that this is not aggressive marketing. As for the collar, there was none and I never like it when there is no out clause and no limitations. The price paid for STB was at a big premium paid in TDFX stock at its bottom. The logical way to structure it was either "we will pay you $X in cash and stocks" or "we will pay you a minimum of $X in cash and stocks and a maximum of $Y in stocks, nominaly set as 1 STBI = 0.65 TDFX". This type of structure is common enough that I have a hard time believing it was not possible to hammer it out. Finaly, why did 3dfx go after STB? Whatever those reasons were, it was possible that somehow there were discrepancies that would have annulled those reasons (take a look at CD and MCK to see what I mean). So the prudent thing to do, was to say something along the lines of "look we are buying you because we want XYZ and are willing to make an offer to make you happy. But if it turns out that somehow you are hiding things from us and that leads to substantial damage or unachievebility of XYZ, then you pay us for the loss". 3dfx did something remotely like this, but not good enough in my opinion. Don't get me wrong; I like the merger on the long term basis. And I also like their "vision". But 3dfx is not going to be fully successful until they get the day to day "little" things right. To do that, they need to look no further than ATI. A lot has been said here about how "sub-par" ATI's technology is. But I have not seen anyone pointing out how it is that company with sub-par technology has been able to stay in the number one position for so long and have such excellent revenue, earnings, and ROE rates for so many years. Here is a hint, just making "cheap" cards for the OEMs will not make you the number one. Sun Tzu