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Technology Stocks : Neomagic Corp. (NMGC)
NMGC 0.01300.0%Nov 14 9:30 AM EST
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To: thedewar who wrote (590)3/12/1998 2:43:00 PM
From: vincenzo  Read Replies (1) of 3645
 
We are pushing 19 again. This is the little stock that could.

There must be a large overhang of stock for sale in the 19's which is putting a lid on this. I suspect that there is are several big holders who want to lighten their exposure before April 2 when the mighty Intel announces their mobile chip roll out for the Pentium 2 1/2.

The big fear is that Intel will announce that they are integrating 3d graphics and display drivers into the primary chipset eliminating the need for a separate graphics chip entirely. The AGP, (accelerated graphics port) architecture in the Pentium 2 allows the graphics engine to use the system memory directly. This could make a graphics chip with integrated dram such as NeoMagics obsolete.

Another concern are the earnings warnings by Intel and Compaq pointing to a slowdown in PC sales this quarter. A significant slowdown in current deliveries while the channel clears out existing inventory is obviously impacting disk drive makers and other PC component suppliers. Any slowdown in order rates even if temporary could make Neo's next quarterly results the kind of surprise nobody wants.

Meanwhile NeoMagic's strategy for mobile Pentium 2 notebooks is unclear. I have seen no mention on whether they are even working on a product which would be compatible with the upcoming Pentium 2 processors.

I think these fears may be prevalent enough to put a lid on NeoMagic's price until the air clears. I am putting off adding further to my NeoMagic stake until some of the above issues are clarified.

vincenzo
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