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Technology Stocks : General Magic
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To: Carbo who started this subject9/3/2000 10:16:03 AM
From: dgurgel  Read Replies (1) of 10081
 
Short-Term Potential

I have been trading GMGC for a little over a year. Noticing its past volatility, my approach has been that of a swing-trader, trying to anticipate news and CC events that will move the stock. The average length of my positions has been about eight weeks.

I try to remember to post my position and my recommendation (if I have one) with every post on RB. I seldom, if ever, have recommended the stock for the long term but have occasionally recommended it for the short term.

I have taken a position again on the belief that GMGC will hit $10-$12 before the year's end for the following reasons.
(1) Onstar PR should be very prominent during the next four months (although GMGC results from Onstar will not be visible until 2001 Q1).
(2) Investor confidence (over-exuberance) and election-year politics should keep the market strong, but perhaps only into November.
(3) Major IBM announcements on Websphere are promised for September. There is a good chance that GMGC gets some mention. Websphere announcements and first sales should soon follow.
(4) VUI investment fever is near its peak.
(5) Results of GMGC's April-June reorganization may result in at least some announced sales outside of Onstar and IBM.

The week leading up to the November 1 CC will be a good time to evaluate positions in GMGC. The CC will serve as a nice punctuation mark to the events of the prior two months (whether positive or negative), and the presidential election during the following week may be an inflection point on the NASDAQ chart. Soon after the November 1 CC GMGC will have to face up to additional financing and will have to quit being a concept stock and start showing real revenues.

For the long term I am not bullish on the stock. I could certainly conceive of revenues justifying a $20 price in 2003; but past execution has been so poor, the management team appears so mediocre, and the financial position remains so precarious that there remains very high risk in my opinion.
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