Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : General Magic -- Ignore unavailable to you. Want to Upgrade?

To: hcirteg who wrote (6694)	7/10/1999 10:18:00 PM
From: Seconds Out	Read Replies (2) \| Respond to of 10081

hcirteg, what did you think about the S-3 that came out the other day? At first I was taken aback by the Nasdaq compliance issue and the mention of de-listing. Upon careful reading of it, though, it appears that the issue revolves around the amount of cash GMGC has on hand in comparison to its burn rate. This comes as nothing new to any of us who have been following the company closely, and the inquiry occurred back in April. And the Nasdaq accepted GMGC's plan of action to resolve its issues I believe on June 7. Of course, de-listing would be a traumatic event to say the least. I am going under the assumption, however, that since it was not mentioned at the Shareholders Meeting June 24, since Dr. Markman stated in his interview with TWST that he was looking for capital from sources that could not only provide funds but provide addition benefits like expediting product to market, and since GMGC publicly states in the S-3 that they are working on a deal that should be completed by July 30, that the S-3 is actually tipping us off that a major event could be occurring at any time now. I imagine it will occur after July 13 conversion period, though. This is all based on my hypothesis that the Nasdaq compliance issue surrounds capital. Assuming it does, it will be interesting to see who the strategic partner will be. Dr. Markman was pretty clear in his interview with TWST that he was not anticipating another round of Convertible Preferred financing. The S-3 states that the current Preferreds have a right of first refusal for any financing involving floor less convertibles. Let us hope it does not happen a third time. I can see why the current Preferred would like that right, though. In fact, it lends even more credibility to the theory of them shorting the stock to gain maximum advantage in the amount of shares they ultimately get for their $20,000,000 investment. The S-3 specifically states that the financing allows shorting and hedging to occur buy them! While I would love to see the stock price start jumping once the Preferreds no longer have a need to short the stock, they will own approximately 5,000,000 new shares upon conversion which I assume they will begin to part with on any decent upticks in order to recoup their capital. Though they may keep some ownership of GMGC stock, even if they kept 1,000,000 shares for the ride they would still be selling off 4,000,000 shares. I guess it will all depend on the type of deal we hear about later this month, about Intuit details being released later this summer, and any other surprise announcements in the near term. We will need some nice big multi-million share days to flush out the availability of stock in the float caused by the Preferreds parting with their shares in order to start to see demand outpacing supply for this stock. It will be at that point, assuming these announcements clear up some of the nagging questions out there, that the stock will begin to appreciate. All this is in my humble opinion, of course. Seconds Out.