3dfx Sells Out

The company is reporting third quarter net losses of $178.6 million, or $4.53 per share. "We have experienced a significant slowdown in demand for our products, especially the Voodoo 3 and Voodoo 5 boards," said 3dfx CEO Alex Leupp, "[and] our inability to secure a bank line of credit has impacted our ability to build inventory to meet even the existing demand." With no turnaround in sight, the company's board of directors is recommending massive workforce reductions, the sale of the majority of the 3dfx's assets to Nvidia and dissolution of the company. The sale of assets, if approved by 3dfx shareholders, will include patents, trademarks, brand names, and chip inventory in exchange for $70 million in cash and one million shares of Nvidia stock. "We strongly believe that to reduce expenses, sell our assets and dissolve the company provides the highest return to our creditors, shareholders, and employees," explained Leupp, "We expect that the combined technologies of 3dfx and NVIDIA will continue the legacy that 3dfx began in 1994."