Neomagic, an IPO Message Board

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Technology Stocks : Neomagic, an IPO

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To: dan plesse who wrote (11)	3/9/1997 11:34:00 PM
From: Stanley Cowen	of 30

Dan, Thanks for the information on the IPO date. After reading the latest SEC filing, maybe the target price of $9.00 may reflect the current value. Even after the IPO, the book value will be only a little more than $1.00 per share. If you assume earnings of $0.30 (my guess) for the coming fiscal year, the PE is 30. Last quarter I believe they earned $0.05. Then it looks like Chips and Technology is not going to sit on their thumbs and will put out a competing chip. On the other hand, Neomagic does have 8 of the 10 largest portable PC manufacturers as customers. I was wondering why Toshiba wasn't on that list especially since they use Japanese company to actually manufacture the chips. This is another potential problem not having manufacturing control and incurring of losses from less than expected chip yields. As you can see, I am having trouble getting off the fence. At least they are now profitable, but can they grow the business with one product line? Time will tell. I will watch the stock and maybe buy on weakness. Stan

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