Found this review on stockpickers
It was published in May but still shows up on their cover page under "LOOK HOW GREAT OUR RECORD IS"
stockpickers.net
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The Hot Stock Report - Free Evaluation
Article written: 5/12/98. Our purchase price on 5/12/98: $9 15/16
General Magic
One of our recent investments is in a company called General Magic. General Magic, symbol 'GMGC' * is listed on the Nasdaq exchange.
For the long term investors in General Magic, their investment since the company went public little more than three years ago has been anything but magic. Up until a couple of months ago, the company's stock price had been on a gradual decline since the highs near 30 three years ago, hitting close to one dollar a share just in the last couple of months.
Then early in March of this year, investors breathed new life into General Magic on the news that Microsoft had invested $6 million into the company. In early May this trend continued as increased excitement pushed the stock price higher than $15 intra-day, on news that the company's new product would be shipped July 30, and that some of the nation's largest telecommunications companies were about to begin extended trials.
So what is this new product and why would anyone buy into a company that has had such terrible stock performance and never turned a profit? Let's look back first.
Originally, the company was offering software that allowed on-line services to set up easy to navigate news and shopping areas. Unfortunately, the evolution of the internet and the world wide web gave this business plan no real chance. Consequently, the share price took a long fall.
Then about a year ago, the company announced plans to basically be reborn with a new focus. The new product that now has the world by storm is called Portico. Portico is the first and only voice controlled message tracking service that uses natural language and not standardized prompts.
What exactly does this mean and what can it do for mobile professionals? It means that this product allows persons on the go to call up and have e-mail and schedules read to back them, it means they can have this product search on the web for specific information and read back to them what they need, and it means that they can even have this virtual assistant alert them on their car phone of select incoming e-mails or other types of messages- all with the user speaking naturally- that's right, naturally - without having to learn standardized voice prompts - now that is a needed service.
But while few have doubted the market for this product, many investors have still been hesitant to get into this stock because of the past failures of this company.
However, things are certainly different now. First of all, some of these major telecommunications companies that General Magic has just announced extended trials with have top executives on General Magic's board of directors.
While this is not a 100% guarantee for acceptance, it does mean that General Magic will probably have every opportunity to prove themselves during these trials and gain acceptance. Moreover, the announcement of these trials in itself suggests this product is market ready and will be accepted- after all, would a top executive want to begin trials on their own company if it wasn't going to be approved by his/her associates?
Finally, the market size that Portico will sell into is enormous. There are over 100 million registered cellular subscribers. At an estimated cost of $20/month, with even 1% market share, revenues generated by this product would be over $240 million a year.
With a current market cap only around $300 million, there certainly seems to be a favorable risk/reward ratio here, and the upside potential looks like it might be far away from current prices.
Check out a demo of the Portico product for yourself - www.generalmagic.com |
