3dfx could this be their plan?

[gplracer]

A friend sent this to me. I think he saw it on voodooextreme

I saw this and thought about it and it does seem to make a lot of sense. Could 3dfx really just be starting over getting rid of a lot of old crap? I sure hope so.

Here it is

Just to make sure I got the link right, I'm posting the message in its entirety. It's a slightly different lingo, for those who don't know, but TDFX is 3dfx's ticker symbol on the Nasdaq stock exchange.

Hey BigTii,
I am not a techie but in discussing the recent news regarding TDFX, there are a couple of things that I want to make clear. Please understand that I am in no way attempting to sound like an expert or know about any insider info. One thing that my fellow investors and I are big on is logic. This is the scenario that we've put together, I would just like to hear your comments about it.

Alot of this information you will already be aware of but what we have done is tried to put the puzzle together.

Within the last 2 years, TDFX bought Gigapixel, STB, and filed a patent infringement lawsuit against Nvidia. The diversification process has been downright terrible.

Within the last year, Nvidia has raised over 500 million in cash. Why do you think that they raised all this money? Do you think that it was because of the royalties they felt they might have to pay if they lost the lawsuit? I don't think so, I think it was definitely because they wanted to buyout TDFX. With a buyout they could kill the lawsuit, take out a competitor, and increase their technology value significantly. All this info is very general but quite significant. I do feel as though TDFX would not be able to pursue the lawsuit independently. It is quite obvious that they wouldn't have the resources to pursue this long-term. I believe that the TDFX has never been interested in being bought out by Nvidia and would much rather be bought out by ATI or any other company who would, after buying TDFX out, pursue the lawsuit on their own. Nvidia knew that no matter what, this lawsuit is not going to just get dropped.

How much did TDFX pay for Gigapixel? I believe it was over $150 million. How much income have the Voodoo cards been bringing in for the last couple of months? I'm not trying to sound sarcastic with these questions but I'm just a little lazy to find out the exact figures.

There is no way that TDFX would buy Gigapixel for over $150 million and then six months down the line sell the Voodo line of products, brand name, Voodoo based patents, Rampage based technology & patents, & Gigapixel to their much hated rivals for barely over $100 million. C'mon now, in using logic we all know that TDFX hasn't sold all of these elements to Nvidia. The one thing that we do know is that TDFX is selling their brand name, Voodoo products, and Voodoo-based patents as well as a group of other patents as well as DROPPING THE PATENT INFRINGEMENT LAWSUIT to Nvidia. Is this good news? DEFINITELY. How much Profit have the Voodoo Cards been bringing in? Another key point in the recent announcement is that Nvidia is paying TDFX somewhere around $70 million and giving them 1 million shares of NVDA stock. This is the KEY POINT. Why would Nvidia give TDFX $1 million shares? They can obviously give TDFX another $50 million with all the cash they have raised. Let me tell you why, TDFX requested the deal like this because they can use the shares as collateral to the banks for future loans. If Nvidia gave them $50 million in cash that's all TDFX can get, but if they use these shares as collateral, they will be able to borrow more money in the future. But what about their bad credit? I do believe that TDFX will use a hefty amount of the cash received from Nvidia to pay off some debt. Did you notice how $15 million is a loan from Nvidia? Well at first we thought, the damn directors are going to give themselves a bonus and walk away happy while us shareholders get nothing. With more analytical thinking, we came to the conclusion that TDFX is doing the best thing that could be done for them right now. They are saying, screw the Voodoo line, screw STB, let's get rid of everything about the company that is not looking forward.

Right now, this is the position that TDFX is in, they have gotten rid of alot of the unprofitable parts within the company and are going to cut operating costs drastically. They now have some cash, a loan from Nvidia as well as collateral for the banks. I'm not sure at all if they have sold the Rampage-based technology to Nvidia but one thing I'm sure of is that they haven't sold Gigapixel to them. My gut feeling is that they haven't sold any Rampage tech and feel as though through this deal, TDFX is going to have the resources to be able to get Rampage out soon as well as focus on Gigapixel tech.

I feel as though the press release was made to sound horrific and at first glance it does, but with a little more insight, I think it is great news. I think that it is really saying : TDFX and Nvidia settle Patent Lawsuit out of court, and TDFX drastically cutting costs to pursue Gigapixel chip creation.

Once again I will restate the facts. TDFX diversification goes terrible, and files patent lawsuit against Nvidia. TDFX in bad shape with high burn rate and no profits. Nvidia raises a bunch of cash. TDFX in terrible shape & starts rebuilding process by selling Juarez plant. TDFX sells the money losing Voodoo-based products, patents, names, and settles infringement lawsuit for $70 million cash and 1 million shares of Nvidia stock. TDFX burn rate is much lower now and they can now focus on the good stuff. I don't know about you BigTii but this week I'll be buying a #### load of shares. This is no pump and dump just don't want shareholders to get screwed. Sorry so long

 

[Czar]

Very interesting, except for the very little fact that nVidia baught every future technology 3dfx is making, including Gigapixel and Rampage. 3dfx has nothing to work with.

 

[odog]

one thing... in the brain burke interview... he says that nvidia owns the gigapixel tech😱

 

[Thanatopsis]

The only thing is, I thought that NVidia not only got the technology, but also the engineers. Without any engineers, how can they hope to put out future products?

 

[odog]

interview

question:What exactly have you bought from 3dfx, and do you now own Gigapixel?

answer:

<< Brian: Their core assets, which includes their patents, patent pending applications, trademarks, branding, and inventory related to the graphics business. Gigapixel was a company who was purchased by 3dfx. We have purchased 3dfx's core assets, so that means we have access to whatever technology might've been developed by either company. The two transactions were different in that the 3dfx/Gigapixel transaction was a complete buyout of the company. Today's announcement is that nVIDIA has only purchased the core assets of 3dfx, so I want to make it clear that it's not a complete buyout. >>

 

[odog]

which in other words means..... even if 3dfx used the gigapixel tech... they would have to pay nvidia to use them🙂

 

[Dufusyte]

I agree that 3dfx's actions over the past year or so &quot;do not make any sense,&quot; but instead of having some great master plan, I think it is just a case of some high treason going on in 3dfx management: one of their top dogs betrayed the company, slew it, and handed it to nVidia on a platter. He will receive his 30 pieces of silver as recompense.

Just to set the facts straight:

- nVidia gets all the patents, pending patents, Gigapixel tech, Rampage tech, Fear tech, etc.

- nVidia gets the 3dfx and Voodoo names

- nVidia does *not* get the 3dfx engineers.

If 3dfx had a master plan, as the poster suggests, then I do not think they would have sold the name &quot;3dfx&quot; to nVidia. Also, please note that the 3dfx press release stated that they intend to dissolve the company.

 

[Dulanic]

The simple fact is 3dfx was out of money.... it was sell their assets to Nvidia and make back some debt or declare bankruptcy and close their doors anyways.... either way 3dfx is closing their doors.

 

[SJ]

Nvidia is trying to get some of the 3dfx engineers.

 

[ElFenix]

most companies don't close their doors when they declare bankruptcy. lots of companies have gotten out of bankruptcy. but, there is no strategy for the company formerly known as 3dfx.

 

[JohnGalt]

you go buy your shares, they are almost worthless now. God, how can you call yourself an investor, your 'logic' is correct but only if the information is actually true. Guys, 3dfx is dead dead dead, there is no plan. Shareholders are already in big troule cause 3dfx probably won't have any money for them after all the liabilites are paid.

 

[Recneps]

If gigapixal tech is not just vaporware and they have vailed patents then the company would have sold for a lot more then 100 million. The main thing nivdia gets is to get ride of the law suite and some apperantly worthless patents. And the brand names will no longer be a threat.

If gigapixal patents were vailed and usefull in reducing memory bandwidth then Nivdia need to buy out 3dfx because HSR was sucking and they needed new tech. ATI many already have an equivilant to gigapixal, because if they didn't then they would have bought up 3dfx, because they produce alot of low end intergated crap graphics that would have benifited from gigapixal in keeping the cost down and would have paid for it self rapidly in the cheap/modiel sections. This would apply to ALL chipset makers that produce intergated crap.

I think that gigapixal is nothing special based on the above writting. Therefor only Nvidia would have something to gain by buying out 3dfx which would explain the low offer. The only other company that would make money off 3dfx sekliton is RAMBUS and there group of sue happy laywers I'm sure they could come up with a sh!t load of new law suites with 3dfx patents. The deal will proble get shut down by the companys shareholders based on how there stock did in the last two days.

 

[Rand]

They have sold all their intellectual protocol to NVidia, they have nothing left to work with. Their getting riod of all their engineers too. I wish it could be ture but there's not a chance.

 

[Noriaki]

I have to agree with Dufusyte:


- nVidia gets all the patents, pending patents, Gigapixel tech, Rampage tech, Fear tech, etc.

- nVidia gets the 3dfx and Voodoo names

- nVidia does *not* get the 3dfx engineers.

If 3dfx had a master plan, as the poster suggests, then I do not think they would have sold the name &quot;3dfx&quot; to nVidia. Also, please note that the 3dfx press release stated that they intend to dissolve the company.

I'd like to see 3dfx pull up, but it's not likely and they did state that they intend to dissolve.

Edit: oh yeah...just a sidenote - nVidia does *not* get the 3dfx engineers. is entirely accurate, nVIdia doesn't get any of 3dfx's engineers as part of this deal, I think nVidia is trying to hire some of them after the fact, but that's just a company hiring some talented people that don't have a job at the moment, it's separate from the 3dfx &quot;core assets&quot; purchase.